Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 1, 2011
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)) |
TABLE OF CONTENTS
| ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION | ||||||||
| ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS | ||||||||
| SIGNATURE | ||||||||
| EXHIBIT INDEX | ||||||||
| EX-99.1 | ||||||||
| EX-99.2 | ||||||||
Table of Contents
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On March 1, 2011, CenterPoint Energy, Inc. (“CenterPoint Energy”) reported fourth quarter and
full year 2010 earnings. For additional information regarding CenterPoint Energy’s fourth quarter
and full year 2010 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 March 1, 2011 regarding CenterPoint Energy, Inc.’s fourth quarter and full year 2010 earnings. | ||
| 99.2 | Supplemental Materials regarding CenterPoint Energy, Inc.’s fourth quarter and full year 2010 earnings. |
Table of Contents
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: March 1, 2011 | By: | /s/ Walter L. Fitzgerald | ||
| Walter L. Fitzgerald | ||||
| Senior Vice President and
Chief Accounting Officer |
||||
Table of Contents
EXHIBIT INDEX
| EXHIBIT | ||
| NUMBER | EXHIBIT DESCRIPTION | |
99.1
|
Press Release issued March 1, 2011 regarding CenterPoint Energy, Inc.’s fourth quarter and full year 2010 earnings. | |
99.2
|
Supplemental Materials regarding CenterPoint Energy, Inc.’s fourth quarter and full year 2010 earnings. |
Exhibit 99.1
|
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 2010 EARNINGS
FULL YEAR 2010 EARNINGS
Houston, TX — March 1, 2011 — CenterPoint Energy, Inc. (NYSE: CNP) today reported net income
of $124 million, or $0.29 per diluted share, for the fourth quarter of 2010 compared to $105
million, or $0.27 per diluted share, for the same period of 2009. Operating income for the fourth
quarter of 2010 was $302 million compared to $299 million for the same period of 2009.
For the year ended December 31, 2010, net income was $442 million, or $1.07 per diluted share,
compared to $372 million, or $1.01 per diluted share, for the same period of 2009. Operating income
for the year ended December 31, 2010, was $1.25 billion compared to $1.12 billion for the same
period of 2009.
“I am pleased with our company’s overall performance in 2010,” said David M. McClanahan, president
and chief executive officer of CenterPoint Energy. “Our regulated electric and natural gas
utilities, and interstate pipelines turned in solid operating and financial performances. Our field
services unit expanded its facilities in the Haynesville shale resulting in substantial increases
in throughput, revenues and operating income. As our performance demonstrates, we continue to
benefit from our balanced portfolio of electric and natural gas assets, and I believe we are well
positioned for the future.”
Electric Transmission & Distribution
The electric transmission & distribution segment reported operating income of $90 million for the
fourth quarter of 2010, consisting of $56 million from the regulated electric transmission &
distribution utility operations (TDU) and $34 million related to securitization bonds. Operating
income for the fourth quarter of 2009 was $95 million, consisting of $61 million from the TDU and
$34 million related to securitization bonds. Operating income for the TDU benefited from growth of
nearly 28,000 metered customers since December 2009 and increased usage, which was more than offset
by higher operation and maintenance expenses in part associated with energy efficiency and system
reliability programs.
Operating income for the year ended December 31, 2010, was $567 million, consisting of $427 million
from the TDU and $140 million related to securitization bonds. Operating income for the same period
of 2009 was $545 million, consisting of $414 million from the TDU and $131 million
related to securitization bonds. Operating income for the TDU benefited from customer growth and
increased usage due in part to favorable weather, partially offset by reduced revenues associated
with the credit to customers’ bills reflecting the benefit of deferred taxes associated with
Hurricane Ike storm restoration costs, and increased operation and maintenance expenses in part
associated with system reliability programs and higher employee-related costs.
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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 |
Natural Gas Distribution
The natural gas distribution segment reported operating income of $86 million for the fourth
quarter of 2010 compared to $99 million for the same period of 2009. The decline in operating
income resulted primarily from milder weather, higher operation and maintenance expenses, and rate
design changes.
Operating income for the year ended December 31, 2010, was $231 million compared to $204 million
for the same period of 2009. Operating results benefited from rate changes, lower pension and
benefit costs, and reduced bad debt expense, partially offset by higher operation and maintenance
expenses.
Interstate Pipelines
The interstate pipelines segment reported operating income of $63 million for the fourth quarter of
2010 compared to $62 million for the same period of 2009. Higher revenues from firm contracts
associated with Phase IV of the Carthage to Perryville pipeline were substantially offset by
reduced revenues from ancillary services.
In addition to operating income, this segment recorded equity income of $4 million for the fourth
quarter of 2010 from its 50 percent interest in the Southeast Supply Header (SESH) compared to
equity income of $5 million for the same period of 2009.
Operating income for the year ended December 31, 2010, was $270 million compared to $256 million
for the same period of 2009. Operating income increased primarily due to higher revenue from new
firm contracts and lower operation and maintenance expenses, partially offset by lower revenue from
ancillary services and off-system sales.
In addition to operating income, this segment recorded equity income of $19 million for the year
ended December 31, 2010, from its interest in SESH compared to equity income of $7 million for the
same period of 2009, which included non-cash charges of $16 million to reflect SESH’s discontinued
use of regulatory accounting.
Field Services
The field services segment reported operating income of $57 million for the fourth quarter of
2010 compared to $22 million for the same period of 2009. Revenue growth from higher gathering
volumes, primarily associated with projects in the Haynesville shale, was partially offset by
increased operation and maintenance expenses primarily related to facility expansions. Operating
income for the fourth quarter of 2010 also included a gain of $21 million associated with the sale
of a small, non-strategic gas gathering system.
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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 |
In addition to operating income, this business had equity income of $2 million in each of the
fourth quarters of 2010 and 2009 from its 50 percent interest in a gathering and processing joint
venture (Waskom).
Operating income for the year ended December 31, 2010, was $151 million compared to $94 million for
the same period of 2009. Revenue growth from higher gathering volumes associated with projects in
the Haynesville and other shale areas was partially offset by increased operation and maintenance
expenses from the new facilities. Operating income for the year ended December 31, 2010, also
included a gain of $21 million associated with the sale of a small, non-strategic gas gathering
system. Equity income from the Waskom joint venture was $10 million for the year ended December 31,
2010, compared to $8 million for the same period of 2009.
Competitive Natural Gas Sales and Services
The competitive natural gas sales and services segment reported no operating income for the fourth
quarter of 2010 compared to operating income of $21 million for the same period of 2009. The
decline in operating income was due to substantially reduced locational and seasonal price
differentials. In addition, operating income for the fourth quarter of 2010 included charges of $10
million resulting from mark-to-market accounting for derivatives associated with certain forward
natural gas purchases and sales used to lock in economic margins, compared to charges of $1 million
for the same period of 2009.
Operating income for the year ended December 31, 2010, was $16 million compared to $21 million for
the same period of 2009. 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, 2010, included gains of $4 million resulting from mark-to-market accounting compared
to charges of $23 million for the same period of 2009. During each of the years ended December 31,
2010 and 2009, there were $6 million in natural gas inventory write-downs to the lower of cost or
market.
Corporate and Other
Net income for the fourth quarter of 2010 included a decrease in deferred income tax expense of $24
million to reflect the effects of restructuring certain gas subsidiaries. Net income for the first
quarter of 2010 reflected an increase in deferred income tax expense of $21 million as a result of
the passing of federal health care legislation that eliminated the future tax deductibility of
certain retiree health care costs.
During the year ended December 31, 2010, the company issued 33 million common shares through an
underwritten public offering, and dividend reinvestment and employee benefit plans.
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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 |
Dividend Declaration
On January 20, 2011, CenterPoint Energy’s board of directors declared a regular quarterly cash
dividend of $0.1975 per share of common stock payable on March 10, 2011, to shareholders of record
as of the close of business on February 16, 2011. This marks the sixth consecutive year the
company has increased its quarterly dividend.
Outlook for 2011
CenterPoint Energy expects earnings for 2011 to be in the range of $1.04 to $1.14 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 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 significant acquisitions or divestitures, any impact to
income from the change in value of Time Warner stocks and the related ZENS securities, 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.
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, 2010. 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.
Webcast of Earnings Conference Call
CenterPoint Energy’s management will host an earnings conference call on Tuesday, March 1, 2011, 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 more than $20 billion. With over 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.
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| FOR IMMEDIATE RELEASE | Page 5 of 5 |
This news release includes forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Actual events and results may differ materially from
those expressed or implied by these forward-looking statements. The statements in this news
release regarding the company’s earnings outlook for 2011 and future financial performance and
results of operations, and other statements that are not historical facts are forward-looking
statements. Each forward-looking statement contained in this news release speaks only as of the
date of this release. Factors that could affect actual results include (1) the resolution of the
true-up proceedings, including, in particular, the results of appeals to the Texas Supreme Court
regarding rulings obtained to date; (2) state and federal legislative and regulatory actions or
developments relating to the environment, including those related to global climate change; (3)
other state and federal legislative and regulatory actions or developments affecting various
aspects of CenterPoint Energy’s businesses, including, among others, energy deregulation or
re-regulation, pipeline safety, health care reform, financial reform and tax legislation; (4)
timely and appropriate rate actions and increases, allowing recovery of costs and a reasonable
return on investment; (5) the timing and outcome of any audits, disputes or other proceedings
related to taxes; (6) problems with construction, implementation of necessary technology or other
issues with respect to major capital projects that result in delays or in cost overruns that cannot
be recouped in rates; (7) industrial, commercial and residential growth in CenterPoint Energy’s
service territories and changes in market demand, including the effects of energy efficiency
measures, and demographic patterns; (8) the timing and extent of changes in commodity prices,
particularly natural gas and natural gas liquids; (9) the timing and extent of changes in the
supply of natural gas, including supplies available for gathering by CenterPoint Energy’s field
services business and transporting by its interstate pipelines; (10) the timing and extent of
changes in natural gas basis differentials; (11) weather variations and other natural phenomena;
(12) the impact of unplanned facility outages; (13) timely and appropriate regulatory actions
allowing securitization or other recovery of costs associated with any future hurricanes or natural
disasters; (14) changes in interest rates or rates of inflation; (15) commercial bank and financial
market conditions, CenterPoint Energy’s access to capital, the cost of such capital, and the
results of our financing and refinancing efforts, including availability of funds in the debt
capital markets; (16) actions by rating agencies; (17) effectiveness of CenterPoint Energy’s risk
management activities; (18) inability of various counterparties to meet their obligations; (19)
non-payment for our services due to financial distress of CenterPoint Energy’s customers; (20) the
ability of GenOn Energy, Inc. (formerly known as RRI Energy, Inc.) and its subsidiaries to satisfy
their obligations to CenterPoint Energy and its subsidiaries; (21) the ability of retail electric
providers, and particularly the two largest customers of the TDU, to satisfy their obligations to
CenterPoint Energy and its subsidiaries; (22) the outcome of litigation brought by or against
CenterPoint Energy; (23) CenterPoint Energy’s ability to control costs; (24) the investment
performance of pension and postretirement benefit plans; (25) potential business strategies,
including restructurings, acquisitions or dispositions of assets or businesses; (26) acquisition
and merger activities; and (27) other factors discussed in CenterPoint Energy’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2010, and other reports CenterPoint Energy or its
subsidiaries may file from time to time with the Securities and Exchange Commission.
###
CenterPoint Energy, Inc. and Subsidiaries
Statements of Consolidated Income
(Millions of Dollars)
(Unaudited)
Statements of Consolidated Income
(Millions of Dollars)
(Unaudited)
| Quarter Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2009 | 2010 | 2009 | 2010 | |||||||||||||
Revenues: |
||||||||||||||||
Electric
Transmission &
Distribution |
$ | 472 | $ | 506 | $ | 2,013 | $ | 2,205 | ||||||||
Natural Gas
Distribution |
1,043 | 813 | 3,384 | 3,213 | ||||||||||||
Competitive
Natural Gas
Sales and
Services |
634 | 592 | 2,230 | 2,651 | ||||||||||||
Interstate
Pipelines |
137 | 145 | 598 | 601 | ||||||||||||
Field Services |
65 | 96 | 241 | 338 | ||||||||||||
Other Operations |
2 | 2 | 11 | 11 | ||||||||||||
Eliminations |
(54 | ) | (56 | ) | (196 | ) | (234 | ) | ||||||||
Total |
2,299 | 2,098 | 8,281 | 8,785 | ||||||||||||
Expenses: |
||||||||||||||||
Natural gas |
1,290 | 1,053 | 4,371 | 4,574 | ||||||||||||
Operation and
maintenance |
438 | 451 | 1,664 | 1,719 | ||||||||||||
Depreciation and
amortization |
181 | 204 | 743 | 864 | ||||||||||||
Taxes other than
income taxes |
91 | 88 | 379 | 379 | ||||||||||||
Total |
2,000 | 1,796 | 7,157 | 7,536 | ||||||||||||
Operating Income |
299 | 302 | 1,124 | 1,249 | ||||||||||||
Other Income (Expense) : |
||||||||||||||||
Gain on
marketable
securities |
14 | 32 | 82 | 67 | ||||||||||||
Loss on indexed
debt securities |
(14 | ) | (31 | ) | (68 | ) | (31 | ) | ||||||||
Interest and
other finance
charges |
(129 | ) | (117 | ) | (513 | ) | (481 | ) | ||||||||
Interest on
transition and
system
restoration
bonds |
(33 | ) | (34 | ) | (131 | ) | (140 | ) | ||||||||
Equity in
earnings of
unconsolidated
affiliates |
7 | 7 | 15 | 29 | ||||||||||||
Other — net |
8 | 5 | 39 | 12 | ||||||||||||
Total |
(147 | ) | (138 | ) | (576 | ) | (544 | ) | ||||||||
Income Before Income Taxes |
152 | 164 | 548 | 705 | ||||||||||||
Income Tax Expense |
(47 | ) | (40 | ) | (176 | ) | (263 | ) | ||||||||
Net Income |
$ | 105 | $ | 124 | $ | 372 | $ | 442 | ||||||||
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.
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)
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, | |||||||||||||||
| 2009 | 2010 | 2009 | 2010 | |||||||||||||
Basic Earnings Per Common Share |
$ | 0.27 | $ | 0.29 | $ | 1.02 | $ | 1.08 | ||||||||
Diluted Earnings Per Common Share |
$ | 0.27 | $ | 0.29 | $ | 1.01 | $ | 1.07 | ||||||||
Dividends Declared per Common Share |
$ | 0.190 | $ | 0.195 | $ | 0.760 | $ | 0.780 | ||||||||
Weighted Average Common Shares Outstanding (000): |
||||||||||||||||
- Basic |
390,922 | 423,860 | 365,229 | 409,721 | ||||||||||||
- Diluted |
393,472 | 426,963 | 367,681 | 412,776 | ||||||||||||
Operating Income by Segment |
||||||||||||||||
Electric Transmission & Distribution: |
||||||||||||||||
Electric Transmission and Distribution Operations |
$ | 61 | $ | 56 | $ | 414 | $ | 427 | ||||||||
Transition and System Restoration Bond Companies |
34 | 34 | 131 | 140 | ||||||||||||
Total Electric Transmission &
Distribution |
95 | 90 | 545 | 567 | ||||||||||||
Natural Gas Distribution |
99 | 86 | 204 | 231 | ||||||||||||
Competitive Natural Gas Sales and Services |
21 | — | 21 | 16 | ||||||||||||
Interstate Pipelines |
62 | 63 | 256 | 270 | ||||||||||||
Field Services |
22 | 57 | 94 | 151 | ||||||||||||
Other Operations |
— | 6 | 4 | 14 | ||||||||||||
Total |
$ | 299 | $ | 302 | $ | 1,124 | $ | 1,249 | ||||||||
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.
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)
Results of Operations by Segment
(Millions of Dollars)
(Unaudited)
| Electric Transmission & Distribution | ||||||||||||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||||||||||
| December 31, | % Diff | December 31, | % Diff | |||||||||||||||||||||
| 2009 | 2010 | Fav/(Unfav) | 2009 | 2010 | Fav/(Unfav) | |||||||||||||||||||
Results of Operations: |
||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Electric transmission and distribution utility |
$ | 392 | $ | 413 | 5 | % | $ | 1,673 | $ | 1,768 | 6 | % | ||||||||||||
Transition and system restoration bond companies |
80 | 93 | 16 | % | 340 | 437 | 29 | % | ||||||||||||||||
Total |
472 | 506 | 7 | % | 2,013 | 2,205 | 10 | % | ||||||||||||||||
Expenses: |
||||||||||||||||||||||||
Operation and maintenance |
211 | 232 | (10 | %) | 774 | 841 | (9 | %) | ||||||||||||||||
Depreciation and amortization |
70 | 74 | (6 | %) | 277 | 293 | (6 | %) | ||||||||||||||||
Taxes other than income taxes |
50 | 51 | (2 | %) | 208 | 207 | — | |||||||||||||||||
Transition and system restoration bond companies |
46 | 59 | (28 | %) | 209 | 297 | (42 | %) | ||||||||||||||||
Total |
377 | 416 | (10 | %) | 1,468 | 1,638 | (12 | %) | ||||||||||||||||
Operating Income |
$ | 95 | $ | 90 | (5 | %) | $ | 545 | $ | 567 | 4 | % | ||||||||||||
Operating Income: |
||||||||||||||||||||||||
Electric transmission and distribution operations |
$ | 61 | $ | 56 | (8 | %) | $ | 414 | $ | 427 | 3 | % | ||||||||||||
Transition and system restoration bond companies |
34 | 34 | — | 131 | 140 | 7 | % | |||||||||||||||||
Total Segment Operating Income |
$ | 95 | $ | 90 | (5 | %) | $ | 545 | $ | 567 | 4 | % | ||||||||||||
Electric Transmission & Distribution
Operating Data: |
||||||||||||||||||||||||
Actual MWH Delivered |
||||||||||||||||||||||||
Residential |
4,774,799 | 5,054,882 | 6 | % | 24,815,397 | 26,554,309 | 7 | % | ||||||||||||||||
Total |
16,632,601 | 17,020,701 | 2 | % | 74,579,298 | 76,973,117 | 3 | % | ||||||||||||||||
Weather (average for service area): |
||||||||||||||||||||||||
Percentage of 10-year average: |
||||||||||||||||||||||||
Cooling degree days |
82 | % | 108 | % | 26 | % | 105 | % | 105 | % | — | |||||||||||||
Heating degree days |
122 | % | 94 | % | (28 | %) | 103 | % | 133 | % | 30 | % | ||||||||||||
Number of metered customers — end of period: |
||||||||||||||||||||||||
Residential |
1,849,019 | 1,874,508 | 1 | % | 1,849,019 | 1,874,508 | 1 | % | ||||||||||||||||
Total |
2,094,210 | 2,122,135 | 1 | % | 2,094,210 | 2,122,135 | 1 | % | ||||||||||||||||
| Natural Gas Distribution | ||||||||||||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||||||||||
| December 31, | % Diff | December 31, | % Diff | |||||||||||||||||||||
| 2009 | 2010 | Fav/(Unfav) | 2009 | 2010 | Fav/(Unfav) | |||||||||||||||||||
Results of Operations: |
||||||||||||||||||||||||
Revenues |
$ | 1,043 | $ | 813 | (22 | %) | $ | 3,384 | $ | 3,213 | (5 | %) | ||||||||||||
Expenses: |
||||||||||||||||||||||||
Natural gas |
713 | 486 | 32 | % | 2,251 | 2,049 | 9 | % | ||||||||||||||||
Operation and maintenance |
161 | 168 | (4 | %) | 639 | 639 | — | |||||||||||||||||
Depreciation and amortization |
40 | 42 | (5 | %) | 161 | 166 | (3 | %) | ||||||||||||||||
Taxes other than income taxes |
30 | 31 | (3 | %) | 129 | 128 | 1 | % | ||||||||||||||||
Total |
944 | 727 | 23 | % | 3,180 | 2,982 | 6 | % | ||||||||||||||||
Operating Income |
$ | 99 | $ | 86 | (13 | %) | $ | 204 | $ | 231 | 13 | % | ||||||||||||
Natural Gas Distribution Operating Data: |
||||||||||||||||||||||||
Throughput data in BCF |
||||||||||||||||||||||||
Residential |
62 | 52 | (16 | %) | 173 | 177 | 2 | % | ||||||||||||||||
Commercial and Industrial |
69 | 67 | (3 | %) | 233 | 249 | 7 | % | ||||||||||||||||
Total Throughput |
131 | 119 | (9 | %) | 406 | 426 | 5 | % | ||||||||||||||||
Weather (average for service area) |
||||||||||||||||||||||||
Percentage of 10-year average: |
||||||||||||||||||||||||
Heating degree days |
110 | % | 100 | % | (10 | %) | 105 | % | 107 | % | 2 | % | ||||||||||||
Number of customers — end of period: |
||||||||||||||||||||||||
Residential |
3,002,114 | 3,016,333 | — | 3,002,114 | 3,016,333 | — | ||||||||||||||||||
Commercial and Industrial |
244,101 | 246,891 | 1 | % | 244,101 | 246,891 | 1 | % | ||||||||||||||||
Total |
3,246,215 | 3,263,224 | 1 | % | 3,246,215 | 3,263,224 | 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.
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)
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 | |||||||||||||||||||||
| 2009 | 2010 | Fav/(Unfav) | 2009 | 2010 | Fav/(Unfav) | |||||||||||||||||||
Results of Operations: |
||||||||||||||||||||||||
Revenues |
$ | 634 | $ | 592 | (7 | %) | $ | 2,230 | $ | 2,651 | 19 | % | ||||||||||||
Expenses: |
||||||||||||||||||||||||
Natural gas |
603 | 582 | 3 | % | 2,165 | 2,591 | (20 | %) | ||||||||||||||||
Operation and maintenance |
9 | 9 | — | 39 | 38 | 3 | % | |||||||||||||||||
Depreciation and amortization |
1 | 1 | — | 4 | 4 | — | ||||||||||||||||||
Taxes other than income taxes |
— | — | — | 1 | 2 | (100 | %) | |||||||||||||||||
Total |
613 | 592 | 3 | % | 2,209 | 2,635 | (19 | %) | ||||||||||||||||
Operating Income |
$ | 21 | $ | — | (100 | %) | $ | 21 | $ | 16 | (24 | %) | ||||||||||||
Competitive Natural Gas Sales and Services Operating Data: |
||||||||||||||||||||||||
Throughput data in BCF |
134 | 144 | 7 | % | 504 | 548 | 9 | % | ||||||||||||||||
Number of customers — end of period |
11,168 | 12,193 | 9 | % | 11,168 | 12,193 | 9 | % | ||||||||||||||||
| Interstate Pipelines | ||||||||||||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||||||||||
| December 31, | % Diff | December 31, | % Diff | |||||||||||||||||||||
| 2009 | 2010 | Fav/(Unfav) | 2009 | 2010 | Fav/(Unfav) | |||||||||||||||||||
Results of Operations: |
||||||||||||||||||||||||
Revenues |
$ | 137 | $ | 145 | 6 | % | $ | 598 | $ | 601 | 1 | % | ||||||||||||
Expenses: |
||||||||||||||||||||||||
Natural gas |
12 | 21 | (75 | %) | 97 | 93 | 4 | % | ||||||||||||||||
Operation and maintenance |
43 | 41 | 5 | % | 166 | 153 | 8 | % | ||||||||||||||||
Depreciation and amortization |
12 | 13 | (8 | %) | 48 | 52 | (8 | %) | ||||||||||||||||
Taxes other than income taxes |
8 | 7 | 13 | % | 31 | 33 | (6 | %) | ||||||||||||||||
Total |
75 | 82 | (9 | %) | 342 | 331 | 3 | % | ||||||||||||||||
Operating Income |
$ | 62 | $ | 63 | 2 | % | $ | 256 | $ | 270 | 5 | % | ||||||||||||
Pipelines Operating Data: |
||||||||||||||||||||||||
Throughput data in BCF |
||||||||||||||||||||||||
Transportation |
357 | 433 | 21 | % | 1,592 | 1,693 | 6 | % | ||||||||||||||||
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.
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)
Results of Operations by Segment
(Millions of Dollars)
(Unaudited)
| Field Services | ||||||||||||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||||||||||
| December 31, | % Diff | December 31, | % Diff | |||||||||||||||||||||
| 2009 | 2010 | Fav/(Unfav) | 2009 | 2010 | Fav/(Unfav) | |||||||||||||||||||
Results of Operations: |
||||||||||||||||||||||||
Revenues |
$ | 65 | $ | 96 | 48 | % | $ | 241 | $ | 338 | 40 | % | ||||||||||||
Expenses: |
||||||||||||||||||||||||
Natural gas |
15 | 19 | (27 | %) | 51 | 72 | (41 | %) | ||||||||||||||||
Operation and maintenance |
23 | 10 | 57 | % | 77 | 85 | (10 | %) | ||||||||||||||||
Depreciation and amortization |
4 | 8 | (100 | %) | 15 | 25 | (67 | %) | ||||||||||||||||
Taxes other than income taxes |
1 | 2 | (100 | %) | 4 | 5 | (25 | %) | ||||||||||||||||
Total |
43 | 39 | 9 | % | 147 | 187 | (27 | %) | ||||||||||||||||
Operating Income |
$ | 22 | $ | 57 | 159 | % | $ | 94 | $ | 151 | 61 | % | ||||||||||||
Field Services Operating Data: |
||||||||||||||||||||||||
Throughput data in BCF |
||||||||||||||||||||||||
Gathering |
114 | 186 | 63 | % | 426 | 650 | 53 | % | ||||||||||||||||
| Other Operations | ||||||||||||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||||||||||
| December 31, | % Diff | December 31, | % Diff | |||||||||||||||||||||
| 2009 | 2010 | Fav/(Unfav) | 2009 | 2010 | Fav/(Unfav) | |||||||||||||||||||
Results of Operations: |
||||||||||||||||||||||||
Revenues |
$ | 2 | $ | 2 | — | $ | 11 | $ | 11 | — | ||||||||||||||
Expenses |
2 | (4 | ) | 300 | % | 7 | (3 | ) | 143 | % | ||||||||||||||
Operating Income |
$ | — | $ | 6 | — | $ | 4 | $ | 14 | 250 | % | |||||||||||||
Capital Expenditures by Segment
(Millions of Dollars)
(Unaudited)
(Millions of Dollars)
(Unaudited)
| Quarter Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2009 | 2010 | 2009 | 2010 | |||||||||||||
Capital Expenditures by Segment |
||||||||||||||||
Electric Transmission & Distribution |
$ | 114 | $ | 146 | $ | 402 | $ | 463 | ||||||||
Hurricane Ike |
— | — | 26 | — | ||||||||||||
Total Electric Transmission & Distribution |
114 | 146 | 428 | 463 | ||||||||||||
Natural Gas Distribution |
44 | 74 | 165 | 202 | ||||||||||||
Competitive Natural Gas Sales and Services |
— | — | 2 | 2 | ||||||||||||
Interstate Pipelines |
58 | 31 | 176 | 102 | ||||||||||||
Field Services |
131 | 196 | 348 | 668 | ||||||||||||
Other Operations |
11 | 10 | 29 | 25 | ||||||||||||
Total |
$ | 358 | $ | 457 | $ | 1,148 | $ | 1,462 | ||||||||
(Millions of Dollars)
(Unaudited)
(Unaudited)
| Quarter Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2009 | 2010 | 2009 | 2010 | |||||||||||||
Interest Expense Detail |
||||||||||||||||
Amortization of Deferred Financing Cost |
$ | 7 | $ | 6 | $ | 34 | $ | 24 | ||||||||
Capitalization of Interest Cost |
— | (4 | ) | (4 | ) | (9 | ) | |||||||||
Transition and System Restoration Bond Interest Expense |
33 | 34 | 131 | 140 | ||||||||||||
Other Interest Expense |
122 | 115 | 483 | 466 | ||||||||||||
Total Interest Expense |
$ | 162 | $ | 151 | $ | 644 | $ | 621 | ||||||||
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.
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)
Condensed Consolidated Balance Sheets
(Millions of Dollars)
(Unaudited)
| December 31, | December 31, | |||||||
| 2009 | 2010 | |||||||
ASSETS |
||||||||
Current Assets: |
||||||||
Cash and cash equivalents |
$ | 740 | $ | 199 | ||||
Other current assets |
2,164 | 2,383 | ||||||
Total current assets |
2,904 | 2,582 | ||||||
Property, Plant and Equipment, net |
10,788 | 11,732 | ||||||
Other Assets: |
||||||||
Goodwill |
1,696 | 1,696 | ||||||
Regulatory assets |
3,677 | 3,446 | ||||||
Other non-current assets |
708 | 655 | ||||||
Total other assets |
6,081 | 5,797 | ||||||
Total Assets |
$ | 19,773 | $ | 20,111 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
Current Liabilities: |
||||||||
Short-term borrowings |
$ | 55 | $ | 53 | ||||
Current portion of transition and system restoration bonds long-term debt |
241 | 283 | ||||||
Current portion of indexed debt |
121 | 126 | ||||||
Current portion of other long-term debt |
541 | 19 | ||||||
Other current liabilities |
2,080 | 2,139 | ||||||
Total current liabilities |
3,038 | 2,620 | ||||||
Other Liabilities: |
||||||||
Accumulated deferred income taxes, net and investment tax credit |
2,792 | 2,943 | ||||||
Regulatory liabilities |
921 | 989 | ||||||
Other non-current liabilities |
1,264 | 1,360 | ||||||
Total other liabilities |
4,977 | 5,292 | ||||||
Long-term Debt: |
||||||||
Transition and system restoration bonds |
2,805 | 2,522 | ||||||
Other |
6,314 | 6,479 | ||||||
Total long-term debt |
9,119 | 9,001 | ||||||
Shareholders’ Equity |
2,639 | 3,198 | ||||||
Total Liabilities and Shareholders’ Equity |
$ | 19,773 | $ | 20,111 | ||||
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.
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)
Condensed Statements of Consolidated Cash Flows
(Millions of Dollars)
(Unaudited)
| Year Ended December 31, | ||||||||
| 2009 | 2010 | |||||||
Cash Flows from Operating Activities: |
||||||||
Net income |
$ | 372 | $ | 442 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
780 | 891 | ||||||
Deferred income taxes |
269 | 199 | ||||||
Write-down of natural gas inventory |
6 | 6 | ||||||
Changes in net regulatory assets |
— | 14 | ||||||
Changes in other assets and liabilities |
398 | (164 | ) | |||||
Other, net |
16 | (2 | ) | |||||
Net Cash Provided by Operating Activities |
1,841 | 1,386 | ||||||
Net Cash Used in Investing Activities |
(896 | ) | (1,420 | ) | ||||
Net Cash Used in Financing Activities |
(372 | ) | (507 | ) | ||||
Net Increase (Decrease) in Cash and Cash Equivalents |
573 | (541 | ) | |||||
Cash and Cash Equivalents at Beginning of Period |
167 | 740 | ||||||
Cash and Cash Equivalents at End of Period |
$ | 740 | $ | 199 | ||||
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.
Exhibit 99.2
| NYSE: CNPwww.CenterPointEnergy.com Fourth Quarter and Full Year 2010 Earnings Supplemental MaterialsMarch 1, 2011 |
| 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 resolution of the true-up proceedings, including, in particular, the results of appeals to the Texas Supreme Court regarding 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, 2010, 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. 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. Cautionary Statement Regarding Forward-Looking Information |
| Full Year 2010 Operating Income Drivers 12 months ended December 31, 2010 InterstatePipelines $14 Field Services$57 Other$10 CompetitiveNatural Gas Sales & Service$(5) Rate increases and annual rate adjustmentsLower pension and benefitsLower bad debt expensesPartially offset by:Other, primarily higher O&M Increased transportation margin primarily from new contractsLower operating expensesPartially offset by:Lower ancillary services, off- system deliveries and other transportation marginsHigher D&A and taxes other than income taxes Natural GasDistribution$27 Electric TDU$13 Increased gathering margin primarily from Haynesville projects4Q 2010 gain on sale of non- strategic assetsPartially offset by:Higher O&MHigher depreciation and other taxes Increased usageCustomer growth Partially offset by:ADFIT credit related to Hurricane Ike restoration costsOther, primarily higher O&M Lower optimization opportunities around pipeline and storage assetsPartially offset by:Positive mark- to-market in 2010 versus negative in 2009 $993 $1,109 (in millions) 2009 2010 Total Operating Income$1,124 Total Operating Income$1,249 Securitization Bonds$131 Securitization Bonds$140 |
| Electric Transmission & Distribution2010 Operating Income* Drivers Increased usage Customer growth Other, primarily higher O&M ADFIT credit related to Hurricane Ike restoration costs * Excludes operating income from transition and system restoration bonds of $131 and $140 for 2009 and 2010, respectively (in millions) 2009 2010 39% Percentage of operating income excluding $140m from securitization bonds |
| Natural Gas Distribution2010 Operating Income Drivers Rate increases and annual rate adjustments Lower pension and benefits Other, primarily higher O&M Lower bad debt expenses (in millions) 2009 2010 21% Percentage of operating income excluding $140m from securitization bonds |
| Interstate Pipelines2010 Operating Income Drivers Increased transportation margin primarily from new contracts Higher D&A and taxes other than income taxes Lower operating expenses Lower ancillary services, off- system deliveries and other transportation margins (in millions) 2009 2010 24% Percentage of operating income excluding $140m from securitization bonds |
| Field Services2010 Operating Income Drivers Increased gathering margin primarily from Haynesville projects Higher O&M 4Q 2010 gain on sale of non- strategic assets Higher depreciation and other taxes (in millions) 2009 2010 14% Percentage of operating income excluding $140m from securitization bonds |
| Competitive Natural Gas Sales & Services2010 Operating Income Drivers Mark-to-market:2010: $4 gain2009: $23 loss Lower optimization opportunities around pipeline and storage assets (in millions) 2009 2010 1% Percentage of operating income excluding $140m from securitization bonds |
| Interstate Pipelines and Field Services2010 Margin1 Contribution - Solid Core Growth Margin equals revenues minus natural gas expenseNatural gas and ancillary services (balancing, system management, liquids)Natural gas and liquids (in millions) $508 $190 Interstate Pipelines Field Services $501 $266 4% 59% 2 3 |
| Equity issued in 2010 |
| Long-term Debt and Capitalization Ratio Excluding transition and system restoration bonds* * The transition and system restoration bonds are non-recourse to CenterPoint Energy and CenterPoint Energy Houston Electric and are serviced through collections of separate charges which are held in trust. ** The debt component reflected on the financial statements was $126 million as of December 31, 2010 and $121 million as of December 31, 2009. The principal amount on which 2% interest is paid was $840 million as of December 31, 2010 and December 31, 2009. The contingent principal amount payable at maturity was $805 million as of December 31, 2010 and $814 million as of December 31, 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 to maintain its current ratings as set forth in S&P's report dated May 5, 2010 14%** 3.0x** |