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): May 11, 2015
CENTERPOINT ENERGY, INC.
(Exact name of registrant as specified in its charter)
| Texas | 1-31447 | 74-0694415 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer 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 Conditions.
On May 11, 2015, CenterPoint Energy, Inc. (“CenterPoint Energy”) reported first quarter 2015 earnings. For additional information regarding CenterPoint Energy’s first quarter 2015 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.
Item 7.01 Regulation FD Disclosure.
CenterPoint Energy is holding a conference call to discuss its first quarter 2015 earnings on May 11, 2015. Information about the call can be found in the press release furnished herewith as Exhibit 99.1. For additional information regarding CenterPoint Energy’s first quarter 2015 earnings, please refer to 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 Supplemental Materials are incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
The information in the Press Release and the Supplemental Materials is being furnished, not filed, pursuant to Item 2.02. and 7.01, respectively. Accordingly, the information in the Press Release and the 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.
| (d) | Exhibits. |
| EXHIBIT NUMBER |
EXHIBIT DESCRIPTION | |
| 99.1 | Press Release issued May 11, 2015 regarding CenterPoint Energy, Inc.’s first quarter 2015 earnings | |
| 99.2 | Supplemental Materials regarding CenterPoint Energy, Inc.’s first quarter 2015 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: May 11, 2015 | By: | /s/ Kristie L. Colvin | ||||
| Kristie L. Colvin | ||||||
| Senior Vice President and Chief Accounting Officer | ||||||
EXHIBIT INDEX
| EXHIBIT NUMBER |
EXHIBIT DESCRIPTION | |
| 99.1 | Press Release issued May 11, 2015 regarding CenterPoint Energy, Inc.’s first quarter 2015 earnings | |
| 99.2 | Supplemental Materials regarding CenterPoint Energy, Inc.’s first quarter 2015 earnings | |
Exhibit 99.1
|
For more information contact Media: Leticia Lowe Phone 713.207.7702 Investors: Carla Kneipp Phone 713.207.6500
| |||
| For Immediate Release | Page 1 of 6 |
CenterPoint Energy reports first quarter 2015 earnings of $0.30 per diluted share and reaffirms full year guidance
| • | Strong customer growth continues: |
| • | Continued 2% annualized growth in metered electric customers |
| • | Continued 1% growth in new gas customers |
| • | Initiated key rate filings, including Houston Electric’s DCRF filing and Gas Operations’ Texas Coast rate case and GRIP filings |
| • | Company reaffirms full-year 2015 consolidated earnings guidance of $1.00 - $1.10 per diluted share; $0.71 - 0.75 utility operations and $0.29 - $0.35 for equity investment in midstream operations |
Houston, TX – May 11, 2015 - CenterPoint Energy, Inc. (NYSE: CNP) today reported net income of $131 million, or $0.30 per diluted share, for the first quarter of 2015, compared with $185 million, or $0.43 per diluted share for the same period of the prior year. On a guidance basis, for the first quarter 2015, CenterPoint Energy earned 30 cents per diluted share. Utility operations earned 22 cents per diluted share and the equity investment in midstream operations earned 8 cents per diluted share.
Operating income for the first quarter of 2015 was $256 million, compared with $295 million in the prior year. Equity income from the company’s investment in midstream operations was $52 million, for the first quarter of 2015, compared with $91 million in the prior year.
“I’m pleased with our first quarter results, which were in-line with our forecasts,” said Scott M. Prochazka, president and chief executive officer of CenterPoint Energy. “Our utilities continue to benefit from strong customer growth, and ongoing attention to cost management. Further, we filed several key rate recovery mechanisms in the quarter. Enable Midstream continues to execute their long-term strategy despite the challenges associated with a lower commodity price environment.”
Electric Transmission & Distribution
The electric transmission & distribution segment reported operating income of $96 million for the first quarter of 2015, consisting of $68 million from the regulated electric transmission & distribution utility operations (TDU) and $28 million related to securitization bonds. Operating income for the first quarter of 2014 was $105 million, consisting of $75 million from the TDU and $30 million related to securitization bonds.
-more-
Page 2 of 6
Operating income for the TDU benefited primarily from higher net transmission-related revenues ($7 million) and continued strong customer growth ($6 million). These benefits were more than offset largely due to milder weather and the related weather hedge ($8 million), reduced equity return ($6 million) and lower right of way revenues ($3 million).
Natural Gas Distribution
The natural gas distribution segment reported operating income of $146 million for the first quarter of 2015, compared with $162 million for the same period of 2014. Operating income benefited from rate relief and customer growth ($7 million). Such benefits were more than offset by reduced usage due to milder weather primarily in our Minnesota service territory ($9 million) and higher depreciation and amortization expense and taxes ($10 million).
Energy Services
The energy services segment reported operating income of $13 million for the first quarter of 2015, compared to $26 million for the same period of 2014. First quarter operating income for 2015 included a mark-to-market accounting loss of $4 million, compared to a gain of $4 million for the same period of 2014. The remaining decrease in operating income was margin-related, primarily as a result of reduced weather-related optimization opportunities for existing gas transportation assets.
Equity Investment in Midstream Operations
The midstream investments segment reported $52 million of equity income for the first quarter of 2015, compared with $91 million in the prior year. In their May 6, 2015, press release, Enable Midstream stated that the decrease in net income attributable to the partnership is primarily a result of lower gross margin due to lower commodity prices.
Cash distributions received in the first quarter of 2015 were $72 million. Further, Enable Midstream declared a quarterly cash distribution on April 24, 2015, from which CenterPoint Energy expects to receive approximately $73 million. This represents an increase of approximately 1.2 percent over the prior quarter distribution.
Refer to Enable Midstream’s earnings press release issued on May 6, 2015, for detailed results of operations.
Dividend Declaration
On April 23, 2015, CenterPoint Energy’s board of directors declared a regular quarterly cash dividend of $0.2475 per share of common stock payable on June 10, 2015, to shareholders of record as of the close of business on May 15, 2015.
-more-
Page 3 of 6
Outlook for 2015
CenterPoint Energy reaffirms that its earnings estimate for 2015 utility operations is in the range of $0.71 to $0.75 per diluted share. The company expects its 2015 earnings estimate from its equity investment in midstream operations to be in the range of $0.29 to $0.35 per diluted share. On a consolidated basis, CenterPoint Energy reaffirms earnings on a guidance basis for 2015 in the range of $1.00 to $1.10 per diluted share.
The utility operations guidance range considers performance to date and certain significant variables that may impact earnings, such as weather, regulatory and judicial proceedings, throughput, commodity prices, effective tax rates, and financing activities. In providing this guidance, the company does not include other potential impacts, such as changes in accounting standards or unusual items, earnings from the change in the value of the ZENS securities and the related stocks, or the timing effects of mark-to-market accounting in the company’s energy service business.
In providing guidance for equity investments in midstream operations, the company assumes a 55.4 percent limited partner ownership interest in Enable Midstream and includes the amortization of our basis differential in Enable Midstream. The company’s guidance takes into account such factors as Enable Midstream’s most recent public outlook for 2015 dated May 6, 2015, and effective tax rates. The company does not include other potential impacts such as any changes in accounting standards or Enable Midstream’s unusual items.
-more-
Page 4 of 6
CenterPoint Energy, Inc. and Subsidiaries
Reconciliation of Net Income and diluted EPS to the basis used in providing 2015 annual earnings guidance
| Quarter Ended March 31, 2015 |
||||||||
| Net Income (in millions) |
EPS | |||||||
| Consolidated as reported |
$ | 131 | $ | 0.30 | ||||
| Midstream Investments |
(33 | ) | (0.08 | ) | ||||
|
|
|
|
|
|||||
| Utility Operations (1) |
98 | $ | 0.22 | |||||
|
|
|
|
|
|||||
| Timing effects impacting CES(2): |
||||||||
| Mark-to-market (gain) losses |
3 | 0.01 | ||||||
| ZENS-related mark-to-market (gains) losses: |
||||||||
| Marketable securities (3) |
11 | 0.03 | ||||||
| Indexed debt securities |
(16 | ) | (0.04 | ) | ||||
|
|
|
|
|
|||||
| Utility operations earnings on an adjusted guidance basis |
$ | 96 | $ | 0.22 | ||||
|
|
|
|
|
|||||
| Per the basis used in providing 2015 earnings guidance: |
||||||||
| Utility Operations on a guidance basis |
$ | 96 | $ | 0.22 | ||||
| Midstream Investments |
33 | 0.08 | ||||||
|
|
|
|
|
|||||
| 2015 Consolidated on guidance basis |
$ | 129 | $ | 0.30 | ||||
|
|
|
|
|
|||||
| (1) | CenterPoint earnings excluding Midstream Investments |
| (2) | Energy Services segment |
| (3) | Time Warner Inc., Time Warner Cable Inc., Time Inc. and AOL Inc. |
-more-
Page 5 of 6
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, 2015. A copy of that report is available on the company’s website, under the Investors section. Other filings the company makes with the SEC and certain documents relating to its corporate governance can also be found under the Investors section.
Webcast of Earnings Conference Call
CenterPoint Energy’s management will host an earnings conference call on Monday, May 11, 2015, 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 on the company’s website under the Investors section. A replay of the call can be accessed approximately two hours after the completion of the call and will be archived on the website for at least one year.
CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution and energy services operations. The company serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. The company also owns a 55.4 percent limited partner interest in Enable Midstream Partners, a publicly traded master limited partnership it jointly controls with OGE Energy Corp., which owns, operates and develops natural gas and crude oil infrastructure assets. With more than 7,400 employees, CenterPoint Energy and its predecessor companies have been in business for more than 140 years. For more information, visit the website at www.CenterPointEnergy.com.
This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual events and results may differ materially from those expressed or implied by these forward-looking statements. Any statements in this news release regarding future earnings, and future financial performance and results of operations, including, but not limited to earnings guidance, and any other statements that are not historical facts are forward-looking statements. Each forward-looking statement contained in this news release speaks only as of the date of this release. Factors that could affect actual results include (1) state and federal legislative and regulatory actions or developments affecting various aspects of CenterPoint Energy’s businesses (including the businesses of Enable Midstream Partners (Enable Midstream)), including, among others, energy deregulation or re-regulation, pipeline integrity and safety, health care reform, financial reform, tax legislation, and actions regarding the rates charged by CenterPoint Energy’s regulated businesses; (2) state and federal legislative and regulatory actions or developments relating to the environment, including those related to global climate change; (3) timely and appropriate rate actions that allow recovery of costs and a reasonable return on investment; (4) the timing and outcome of any audits, disputes or other proceedings related to taxes; (5) 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; (6) 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; (7) the timing and extent of changes in commodity prices, particularly natural gas and natural gas liquids, and the effects of geographic and seasonal commodity price differentials, and the impact of commodity changes on producer related activities; (8) weather variations and other natural phenomena, including the impact on operations and capital from severe weather events; (9) any direct or indirect effects on CenterPoint Energy’s facilities, operations and financial condition resulting from terrorism, cyber-attacks, data security breaches or other attempts to disrupt its businesses or the businesses of third parties, or other catastrophic events; (10) the impact of unplanned facility outages; (11) timely and appropriate regulatory actions allowing securitization or other recovery of costs associated with any future hurricanes or natural disasters; (12) changes in interest rates or rates of inflation; (13)
-more-
Page 6 of 6
commercial bank and financial market conditions, CenterPoint Energy’s access to capital, the cost of such capital, and the results of its financing and refinancing efforts, including availability of funds in the debt capital markets; (14) actions by credit rating agencies; (15) effectiveness of CenterPoint Energy’s risk management activities; (16) inability of various counterparties to meet their obligations; (17) non-payment for services due to financial distress of CenterPoint Energy’s customers; (18) the ability of GenOn Energy, Inc. (formerly known as RRI Energy, Inc.), a wholly owned subsidiary of NRG Energy, Inc., and its subsidiaries to satisfy their obligations to CenterPoint Energy and its subsidiaries; (19) the ability of retail electric providers, and particularly the largest customers of the TDU, to satisfy their obligations to CenterPoint Energy and its subsidiaries; (20) the outcome of litigation brought by or against CenterPoint Energy or its subsidiaries; (21) CenterPoint Energy’s ability to control costs, invest planned capital, or execute growth projects; (22) the investment performance of pension and postretirement benefit plans; (23) potential business strategies, including restructurings, joint ventures, and acquisitions or dispositions of assets or businesses, for which no assurance can be given that they will be completed or will provide the anticipated benefits to CenterPoint Energy; (24) acquisition and merger activities involving CenterPoint Energy or its competitors; (25) future economic conditions in regional and national markets and their effects on sales, prices and costs; (26) the performance of Enable Midstream, the amount of cash distributions CenterPoint Energy receives from Enable Midstream, and the value of its interest in Enable Midstream, and factors that may have a material impact on such performance, cash distributions and value, including certain of the factors specified above and: (A) the integration of the operations of the businesses contributed to Enable Midstream; (B) the achievement of anticipated operational and commercial synergies and expected growth opportunities, and the successful implementation of Enable Midstream’s business plan; (C) competitive conditions in the midstream industry, and actions taken by Enable Midstream’s customers and competitors, including the extent and timing of the entry of additional competition in the markets served by Enable Midstream; (D) the timing and extent of changes in the supply of natural gas and associated commodity prices, particularly natural gas and natural gas liquids, the competitive effects of the available pipeline capacity in the regions served by Enable Midstream, and the effects of geographic and seasonal commodity price differentials, including the effects of these circumstances on re-contracting available capacity on Enable Midstream’s interstate pipelines; (E) the demand for natural gas, NGLs and transportation and storage services; (F) changes in tax status; (G) access to growth capital; and (H) the availability and prices of raw materials for current and future construction projects; and (27) other factors discussed in CenterPoint Energy’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as well as in CenterPoint Energy’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, and other reports CenterPoint Energy or its subsidiaries may file from time to time with the Securities and Exchange Commission.
Use of Non-GAAP Financial Measures
In addition to presenting its financial results in accordance with generally accepted accounting principles (GAAP), CenterPoint Energy also provides guidance based on adjusted diluted earnings per share, which is a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance that excludes or includes amounts that are not normally excluded or included in the most directly comparable GAAP financial measure. A reconciliation of net income and diluted earnings per share to the basis used in providing 2015 guidance is provided in this news release.
Management evaluates financial performance in part based on adjusted diluted earnings per share and believes that presenting this non-GAAP financial measure enhances an investor’s understanding of CenterPoint Energy’s overall financial performance by providing them with an additional meaningful and relevant comparison of current and anticipated future results across periods by excluding items that Management does not believe most accurately reflect its fundamental business performance, which items include the items reflected in the reconciliation table of this news release. This non-GAAP financial measure should be considered as a supplement and complement to, and not as a substitute for, or superior to, the most directly comparable GAAP financial measure and may be different than non-GAAP financial measures used by other companies.
###
CenterPoint Energy, Inc. and Subsidiaries
Statements of Consolidated Income
(Millions of Dollars)
(Unaudited)
| Quarter Ended | ||||||||
| March 31, | ||||||||
| 2015 | 2014 | |||||||
| Revenues: |
||||||||
| Electric Transmission & Distribution |
$ | 612 | $ | 629 | ||||
| Natural Gas Distribution |
1,193 | 1,487 | ||||||
| Energy Services |
650 | 1,084 | ||||||
| Other Operations |
4 | 4 | ||||||
| Eliminations |
(26 | ) | (41 | ) | ||||
|
|
|
|
|
|||||
| Total |
2,433 | 3,163 | ||||||
|
|
|
|
|
|||||
| Expenses: |
||||||||
| Natural gas |
1,354 | 2,043 | ||||||
| Operation and maintenance |
498 | 479 | ||||||
| Depreciation and amortization |
217 | 235 | ||||||
| Taxes other than income taxes |
108 | 111 | ||||||
|
|
|
|
|
|||||
| Total |
2,177 | 2,868 | ||||||
|
|
|
|
|
|||||
| Operating Income |
256 | 295 | ||||||
|
|
|
|
|
|||||
| Other Income (Expense) : |
||||||||
| Loss on marketable securities |
(17 | ) | (30 | ) | ||||
| Gain on indexed debt securities |
24 | 43 | ||||||
| Interest and other finance charges |
(89 | ) | (84 | ) | ||||
| Interest on transition and system restoration bonds |
(28 | ) | (30 | ) | ||||
| Equity in earnings of unconsolidated affiliates |
52 | 91 | ||||||
| Other - net |
11 | 9 | ||||||
|
|
|
|
|
|||||
| Total |
(47 | ) | (1 | ) | ||||
|
|
|
|
|
|||||
| Income Before Income Taxes |
209 | 294 | ||||||
| Income Tax Expense |
78 | 109 | ||||||
|
|
|
|
|
|||||
| Net Income |
$ | 131 | $ | 185 | ||||
|
|
|
|
|
|||||
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, | ||||||||
| 2015 | 2014 | |||||||
| Basic Earnings Per Common Share |
$ | 0.30 | $ | 0.43 | ||||
|
|
|
|
|
|||||
| Diluted Earnings Per Common Share |
$ | 0.30 | $ | 0.43 | ||||
|
|
|
|
|
|||||
| Dividends Declared per Common Share |
$ | 0.2475 | $ | 0.2375 | ||||
| Weighted Average Common Shares Outstanding (000): |
||||||||
| - Basic |
429,955 | 429,163 | ||||||
| - Diluted |
431,183 | 430,559 | ||||||
| Operating Income by Segment |
||||||||
| Electric Transmission & Distribution: |
||||||||
| Electric Transmission and Distribution Operations |
$ | 68 | $ | 75 | ||||
| Transition and System Restoration Bond Companies |
28 | 30 | ||||||
|
|
|
|
|
|||||
| Total Electric Transmission & Distribution |
96 | 105 | ||||||
| Natural Gas Distribution |
146 | 162 | ||||||
| Energy Services |
13 | 26 | ||||||
| Other Operations |
1 | 2 | ||||||
|
|
|
|
|
|||||
| Total |
$ | 256 | $ | 295 | ||||
|
|
|
|
|
|||||
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 | |||||||||||
| 2015 | 2014 | Fav/(Unfav) | ||||||||||
| Results of Operations: |
||||||||||||
| Revenues: |
||||||||||||
| Electric transmission and distribution utility |
$ | 514 | $ | 502 | 2 | % | ||||||
| Transition and system restoration bond companies |
98 | 127 | (23 | %) | ||||||||
|
|
|
|
|
|||||||||
| Total |
612 | 629 | (3 | %) | ||||||||
|
|
|
|
|
|||||||||
| Expenses: |
||||||||||||
| Operation and maintenance |
307 | 288 | (7 | %) | ||||||||
| Depreciation and amortization |
83 | 81 | (2 | %) | ||||||||
| Taxes other than income taxes |
56 | 58 | 3 | % | ||||||||
| Transition and system restoration bond companies |
70 | 97 | 28 | % | ||||||||
|
|
|
|
|
|||||||||
| Total |
516 | 524 | 2 | % | ||||||||
|
|
|
|
|
|||||||||
| Operating Income |
$ | 96 | $ | 105 | (9 | %) | ||||||
|
|
|
|
|
|||||||||
| Operating Income: |
||||||||||||
| Electric transmission and distribution operations |
$ | 68 | $ | 75 | (9 | %) | ||||||
| Transition and system restoration bond companies |
28 | 30 | (7 | %) | ||||||||
|
|
|
|
|
|||||||||
| Total Segment Operating Income |
$ | 96 | $ | 105 | (9 | %) | ||||||
|
|
|
|
|
|||||||||
| Electric Transmission & Distribution Operating Data: |
||||||||||||
| Actual MWH Delivered |
||||||||||||
| Residential |
5,412,794 | 5,282,384 | 2 | % | ||||||||
| Total |
18,014,776 | 17,718,811 | 2 | % | ||||||||
| Weather (average for service area): |
||||||||||||
| Percentage of 10-year average: |
||||||||||||
| Cooling degree days |
57 | % | 52 | % | 5 | % | ||||||
| Heating degree days |
135 | % | 136 | % | (1 | %) | ||||||
| Number of metered customers - end of period: |
||||||||||||
| Residential |
2,043,463 | 1,994,506 | 2 | % | ||||||||
| Total |
2,310,706 | 2,257,065 | 2 | % | ||||||||
| Natural Gas Distribution | ||||||||||||
| Quarter Ended | ||||||||||||
| March 31, | % Diff | |||||||||||
| 2015 | 2014 | Fav/(Unfav) | ||||||||||
| Results of Operations: |
||||||||||||
| Revenues |
$ | 1,193 | $ | 1,487 | (20 | %) | ||||||
| Natural gas |
756 | 1,039 | 27 | % | ||||||||
|
|
|
|
|
|||||||||
| Gross Margin |
437 | 448 | (2 | %) | ||||||||
|
|
|
|
|
|||||||||
| Expenses: |
||||||||||||
| Operation and maintenance |
186 | 187 | 1 | % | ||||||||
| Depreciation and amortization |
55 | 48 | (15 | %) | ||||||||
| Taxes other than income taxes |
50 | 51 | 2 | % | ||||||||
|
|
|
|
|
|||||||||
| Total |
291 | 286 | (2 | %) | ||||||||
|
|
|
|
|
|||||||||
| Operating Income |
$ | 146 | $ | 162 | (10 | %) | ||||||
|
|
|
|
|
|||||||||
| Natural Gas Distribution Operating Data: |
||||||||||||
| Throughput data in BCF |
||||||||||||
| Residential |
97 | 106 | (8 | %) | ||||||||
| Commercial and Industrial |
88 | 97 | (9 | %) | ||||||||
|
|
|
|
|
|||||||||
| Total Throughput |
185 | 203 | (9 | %) | ||||||||
|
|
|
|
|
|||||||||
| Weather (average for service area) |
||||||||||||
| Percentage of 10-year average: |
||||||||||||
| Heating degree days |
113 | % | 126 | % | (13 | %) | ||||||
| Number of customers - end of period: |
||||||||||||
| Residential |
3,137,337 | 3,103,209 | 1 | % | ||||||||
| Commercial and Industrial |
251,811 | 248,625 | 1 | % | ||||||||
|
|
|
|
|
|||||||||
| Total |
3,389,148 | 3,351,834 | 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)
| Energy Services | ||||||||||||
| Quarter Ended | ||||||||||||
| March 31, | % Diff | |||||||||||
| 2015 | 2014 | Fav/(Unfav) | ||||||||||
| Results of Operations: |
||||||||||||
| Revenues |
$ | 650 | $ | 1,084 | (40 | %) | ||||||
| Natural gas |
624 | 1,045 | 40 | % | ||||||||
|
|
|
|
|
|||||||||
| Gross Margin |
26 | 39 | (33 | %) | ||||||||
|
|
|
|
|
|||||||||
| Expenses: |
||||||||||||
| Operation and maintenance |
12 | 12 | — | |||||||||
| Depreciation and amortization |
1 | 1 | — | |||||||||
|
|
|
|
|
|||||||||
| Total |
13 | 13 | — | |||||||||
|
|
|
|
|
|||||||||
| Operating Income |
$ | 13 | $ | 26 | (50 | %) | ||||||
|
|
|
|
|
|||||||||
| Mark-to-market gain (loss) |
$ | (4 | ) | $ | 4 | (200 | %) | |||||
|
|
|
|
|
|||||||||
| Energy Services Operating Data: |
||||||||||||
| Throughput data in BCF |
185 | 184 | 1 | % | ||||||||
|
|
|
|
|
|||||||||
| Number of customers - end of period |
18,206 | 17,395 | 5 | % | ||||||||
|
|
|
|
|
|||||||||
| Other Operations | ||||||||||||
| Quarter Ended | ||||||||||||
| March 31, | % Diff | |||||||||||
| 2015 | 2014 | Fav/(Unfav) | ||||||||||
| Results of Operations: |
||||||||||||
| Revenues |
$ | 4 | $ | 4 | — | |||||||
| Expenses |
3 | 2 | (50 | %) | ||||||||
|
|
|
|
|
|||||||||
| Operating Income |
$ | 1 | $ | 2 | (50 | %) | ||||||
|
|
|
|
|
|||||||||
Capital Expenditures by Segment
(Millions of Dollars)
(Unaudited)
| Quarter Ended | ||||||||||
| March 31, | ||||||||||
| 2015 | 2014 | |||||||||
| Capital Expenditures by Segment |
||||||||||
| Electric Transmission & Distribution |
$ | 208 | $ | 187 | ||||||
| Natural Gas Distribution |
91 | 83 | ||||||||
| Energy Services |
1 | 1 | ||||||||
| Other Operations |
9 | 15 | ||||||||
|
|
|
|
|
|||||||
| Total |
$ | 309 | $ | 286 | ||||||
|
|
|
|
|
|||||||
Interest Expense Detail
(Millions of Dollars)
(Unaudited)
| Quarter Ended | ||||||||||
| March 31, | ||||||||||
| 2015 | 2014 | |||||||||
| Interest Expense Detail |
||||||||||
| Amortization of Deferred Financing Cost |
$ | 6 | $ | 6 | ||||||
| Capitalization of Interest Cost |
(3 | ) | (3 | ) | ||||||
| Transition and System Restoration Bond Interest Expense |
28 | 30 | ||||||||
| Other Interest Expense |
86 | 81 | ||||||||
|
|
|
|
|
|||||||
| Total Interest Expense |
$ | 117 | $ | 114 | ||||||
|
|
|
|
|
|||||||
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)
| March 31, 2015 |
December 31, 2014 |
|||||||
| ASSETS | ||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | 234 | $ | 298 | ||||
| Other current assets |
2,457 | 2,970 | ||||||
|
|
|
|
|
|||||
| Total current assets |
2,691 | 3,268 | ||||||
|
|
|
|
|
|||||
| Property, Plant and Equipment, net |
10,670 | 10,502 | ||||||
|
|
|
|
|
|||||
| Other Assets: |
||||||||
| Goodwill |
840 | 840 | ||||||
| Regulatory assets |
3,426 | 3,527 | ||||||
| Investment in unconsolidated affiliates |
4,501 | 4,521 | ||||||
| Other non-current assets |
542 | 542 | ||||||
|
|
|
|
|
|||||
| Total other assets |
9,309 | 9,430 | ||||||
|
|
|
|
|
|||||
| Total Assets |
$ | 22,670 | $ | 23,200 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities: |
||||||||
| Short-term borrowings |
$ | — | $ | 53 | ||||
| Current portion of transition and system restoration bonds long-term debt |
380 | 372 | ||||||
| Indexed debt |
154 | 152 | ||||||
| Current portion of other long-term debt |
271 | 271 | ||||||
| Other current liabilities |
2,382 | 2,627 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
3,187 | 3,475 | ||||||
|
|
|
|
|
|||||
| Other Liabilities: |
||||||||
| Accumulated deferred income taxes, net |
4,716 | 4,757 | ||||||
| Regulatory liabilities |
1,243 | 1,206 | ||||||
| Other non-current liabilities |
1,183 | 1,205 | ||||||
|
|
|
|
|
|||||
| Total other liabilities |
7,142 | 7,168 | ||||||
|
|
|
|
|
|||||
| Long-term Debt: |
||||||||
| Transition and system restoration bonds |
2,528 | 2,674 | ||||||
| Other |
5,239 | 5,335 | ||||||
|
|
|
|
|
|||||
| Total long-term debt |
7,767 | 8,009 | ||||||
|
|
|
|
|
|||||
| Shareholders’ Equity |
4,574 | 4,548 | ||||||
|
|
|
|
|
|||||
| Total Liabilities and Shareholders’ Equity |
$ | 22,670 | $ | 23,200 | ||||
|
|
|
|
|
|||||
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, | ||||||||
| 2015 | 2014 | |||||||
| Cash Flows from Operating Activities: |
||||||||
| Net income |
$ | 131 | $ | 185 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
224 | 242 | ||||||
| Deferred income taxes |
7 | 4 | ||||||
| Write-down of natural gas inventory |
2 | — | ||||||
| Changes in net regulatory assets |
58 | 27 | ||||||
| Changes in other assets and liabilities |
245 | (70 | ) | |||||
| Other, net |
(1 | ) | (8 | ) | ||||
|
|
|
|
|
|||||
| Net Cash Provided by Operating Activities |
666 | 380 | ||||||
| Net Cash Used in Investing Activities |
(337 | ) | (316 | ) | ||||
| Net Cash Provided by (Used in) Financing Activities |
(393 | ) | 107 | |||||
|
|
|
|
|
|||||
| Net Increase (Decrease) in Cash and Cash Equivalents |
(64 | ) | 171 | |||||
| Cash and Cash Equivalents at Beginning of Period |
298 | 208 | ||||||
|
|
|
|
|
|||||
| Cash and Cash Equivalents at End of Period |
$ | 234 | $ | 379 | ||||
|
|
|
|
|
|||||
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.
 May 11
th
, 2015
First Quarter 2015 Earnings Call
•
Strong Customer Growth
•
Key Regulatory Filings
•
Guidance Reaffirmed
Exhibit 99.2 |
 investors.centerpointenergy.com
2
Cautionary Statement
Some of the factors that could cause actual results to differ from those expressed or implied
by our forward-looking statements include but are not limited to the timing and
impact of future regulatory, legislative and IRS decisions, financial market conditions, future market conditions, economic and employment conditions,
customer
growth
and
other
factors
described
in
CenterPoint
Energy,
Inc.’s
Form
10-K
for
the
period
ended
December
31,
2014
under
“Risk
Factors”
and
“Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations
-
Certain
Factors
Affecting
Future
Earnings,”
in
CenterPoint
Energy,
Inc.’s
Form
10-Q
for
the
quarter
ended
March
31,
2015
under
“Cautionary
Statement
Regarding
Forward-Looking
Information,”
“Risk
Factors”
and
“Management’s
Discussion
and
Analysis of
Financial
Condition
and
Results
of
Operations
of
CenterPoint
Energy,
Inc.
and
Subsidiaries”
and in other filings with the SEC by CenterPoint Energy, which can be found
at www.centerpointenergy.com
on the Investor Relations page or on the SEC’s website at
www.sec.gov. 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. You should not place undue reliance on forward-looking
statements. 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. The absence of these words,
however, does not mean that the statements are not forward-looking. 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.
This presentation contains time sensitive information that is accurate as of the date
hereof. Some of the information in this presentation in unaudited and may be
subject to change. We undertake no obligation to update the information presented herein
except as required by law. Investors and others should note that we may announce
material information using SEC filings, press releases, public conference calls, webcasts and the Investors
page of our website. In the future, we will continue to use these channels to distribute
material information about the Company and to communicate important information about
the Company, key personnel, corporate initiatives, regulatory updates and other matters. Information that we post on our website could be
deemed material; therefore, we encourage investors, the media, our customers, business
partners and others interested in our Company to review the information we post on our
website. Use of Non-GAAP Financial Measures
In addition to presenting its financial results in accordance with generally accepted
accounting principles (“GAAP”), CenterPoint Energy also provides guidance
based on adjusted diluted earnings per share, which is a non-GAAP financial measure.
Generally, a non-GAAP financial measure is a numerical measure of a company’s
historical or future financial performance that excludes or includes amounts that are not
normally excluded or included in the most directly comparable GAAP financial
measure. A full reconciliation of net income and diluted earnings per share to the basis
used in providing guidance is provided in this presentation on slide 16.
Management evaluates financial performance in part based on adjusted diluted earnings per
share and believes that presenting this non-GAAP financial measure enhances an
investor’s understanding of CenterPoint Energy’s overall financial performance by providing them with an additional meaningful and relevant comparison
of current and anticipated future results across periods by excluding items that Management
does not believe most accurately reflect its fundamental business performance, which
items include the items reflected in the reconciliation table on page 16 of this presentation. This non-GAAP financial measure should be
considered as a supplement and complement to, and not as a substitute for, or superior to, the
most directly comparable GAAP financial measure and may be different than non-GAAP
financial measures used by other companies. |
 investors.centerpointenergy.com
3
Scott
Prochazka
–
President
and
CEO
Earnings Call Discussion Highlights
First Quarter Results
Utility Earnings
Enable Midstream
Houston Economy |
 investors.centerpointenergy.com
4
First Quarter 2015 Highlights
GAAP EPS
Q1 2015 vs Q1 2014 Drivers
(EPS on a Guidance Basis)
Rate Relief
Customer Growth
Enable
EPS on a Guidance Basis
2015 Utility Operations EPS on a Guidance Basis vs 2014 Baseline
Weather Impact
Interest Expense
Favorable Variance
Unfavorable Variance
Note: Refer to slides 14 and 15 for reconciliation to baseline
Equity Return
related to True-up
$0.22
$0.21
2015
Q1 2014 Baseline
$0.22
$0.27
$0.08
$0.13
2015
2014
$0.22
$0.30
$0.08
$0.13
2015
2014
$0.30
$0.30
$0.40
$0.43 |
 investors.centerpointenergy.com
5
Tracy Bridge –
EVP & President, Electric Division
Earnings Call Discussion Highlights
Electric Results
Customer Growth
Brazos Valley Connection
Regulatory Update
Intelligent Grid
Construction of high voltage transmission infrastructure |
 investors.centerpointenergy.com
Houston Electric: Residential Electric Customers and Houston
Employment vs West Texas Intermediate (WTI)
Houston Electric:
Over 2% annual customer growth since 1980
Over 2.4% residential customer growth in 2014
2% annualized customer growth -
1
quarter of 2015
Sources: ¹
Company
Provided
2
Texas
Workforce
Commission
(Houston,
Sugarland,
Woodlands
Metro)
3
Energy
Information
Administration
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
$120
$130
$140
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
6
Residential Customers
1
Employment
2
WTI-Real Dollars (2010=100)
3
st |
 investors.centerpointenergy.com
7
Houston Electric: Brazos Valley Connection
Project Cost Estimate:
$276 to $383 million, depending
on route selection and other variables
PUC Docket #:
44547
Project Timeline:
Action
Estimated Timeframe
CCN Filed
April 24, 2015
PUC Proceeding
Second/Third Quarters 2015
PUC Decision
Fourth Quarter 2015
Project Construction
2016 –
2018
Project Completion
Mid-2018 |
 investors.centerpointenergy.com
Houston Electric: Distribution Cost Recovery Factor (DCRF)
DCRF Equation (how it works)
DCRF Revenue Requirement
Revenue requirement associated with eligible
distribution capital since last rate case
Growth Adjustment
Revenue adjustment associated with growth in
customer count and usage since last rate case
DCRF Revenue Increase
Annualized revenue increase in the amount
shown below
Houston Electric April 6
th
, 2015 DCRF Filing
Docket Number
44572
Annualized Revenue Increase Amount
$16.7 MM
Scheduled Hearing
June 15
th
Final Decision
Anticipated during Q3 2015
Requested Effective Date
September 1
st
8 |
 investors.centerpointenergy.com
Houston Electric: Realization of Intelligent Grid Benefits
Customer Satisfaction, Cost Control and Carbon Reduction
9
Absence of generation assets significantly reduces
CenterPoint’s carbon footprint compared to
integrated utilities
One of the first large scale
Smart Meter deployments in the
U.S.
Eliminated need for over 8
million truck rolls since 2009
Intelligent Grid initiative enhances
reliability
28% Reliability improvement in 2014
These efforts strengthen the tie between the
customer and the utility
1
Since 2011
1 |
 investors.centerpointenergy.com
10
Joe McGoldrick –
EVP & President, Gas Division
Earnings Call Discussion Highlights
Gas Operations Results
Weather Impacts
Regulatory Update
Energy Services Results
Using horizontal directional drilling to construct and install a
new pipeline under the bed of the Arkansas River
|
 investors.centerpointenergy.com
Natural Gas Utilities: Regulatory Updates
Jurisdiction –
Mechanism
Expected
Effective Date
Requested
Increase -
$MM
Comments
Oklahoma –
PBRC
3Q 2015
$0.9
Mississippi –
RRA
3Q 2015
$2.5
South Texas –
GRIP
3Q 2015
$4.2
Beaumont/East TX –
GRIP
3Q 2015
$5.9
TX Coast –
Rate Case
4Q 2015
$6.8
Included a rate base of $132.3
million and a ROE of 10.25%
PBRC –
Performance Based Rate Change; GRIP –
Gas Reliability Infrastructure Program; RRA –
Rate Regulation Adjustment
11
Jurisdiction
Expected
Filing Date
Comments
Minnesota
3Q 2015
Interim rates expected in 4Q 2015
Arkansas
4Q 2015
Must file to utilize AR Act 725
Filings YTD
Upcoming General Rate Case Filings |
 investors.centerpointenergy.com
Natural Gas Utilities: Arkansas Formula Rate Plan
12
Arkansas Act 725 Highlights
•
The utility may elect to:
•
Have rates regulated under an annual
formula rate review mechanism
•
Utilize a forward test year
•
Rates adjusted annually to restore revenues to
the target ROE when earned ROE is above or
below target by more than 50 bps |
 investors.centerpointenergy.com
13
Bill Rogers –
EVP & CFO
Earnings Call Discussion Highlights
Quarterly Drivers
Strong Cash Flow
Financing Plan
Guidance Reaffirmed
Dividend Declaration |
 investors.centerpointenergy.com
14
Q1 EPS Normalization
GAAP to Guidance Basis to Baseline
Note: Please refer to slide 16 for the full reconciliation table and slide 2 for
information on non-GAAP measures
Quarter Ended
Quarter Ended
March 31, 2015
March 31, 2014
Net Income ($MM)
EPS
Net Income ($MM)
EPS
Consolidated as reported
131
$
0.30
$
185
$
0.43
$
Midstream Investments as reported
(33)
(0.08)
$
(57)
(0.13)
$
Utility Operations
(1)
as reported
98
$
0.22
$
128
$
0.30
$
Per the basis used in providing earnings guidance:
Utility Operations on a guidance basis
96
0.22
$
117
0.27
$
Midstream Investments
33
0.08
$
57
0.13
$
Consolidated on a guidance basis
129
$
0.30
$
174
$
0.40
$
(1)
CenterPoint earnings excluding Midstream Investments |
 investors.centerpointenergy.com
15
2014 Q1 Baseline EPS to 2015 Q1 EPS on a Guidance Basis
Note: Please refer to slide 16 for the full reconciliation table and slide 2 for
information on non-GAAP measures
1. Other includes primarily higher depreciation expense, lower right of way revenue, higher
O&M Quarter Ended
Quarter Ended
March 31, 2015
March 31, 2014
Net Income ($MM)
EPS
Net Income ($MM)
EPS
Consolidated as reported
131
$
0.30
$
185
$
0.43
$
Midstream Investments as reported
(33)
(0.08)
$
(57)
(0.13)
$
Utility Operations
(1)
as reported
98
$
0.22
$
128
$
0.30
$
Per the basis used in providing earnings guidance:
Utility Operations on a guidance basis
96
$
0.22
117
0.27
$
Midstream Investments
33
0.08
$
57
0.13
$
Consolidated on a guidance basis
129
$
0.30
$
174
$
0.40
$
(1)
CenterPoint earnings excluding Midstream Investments
1 |
 investors.centerpointenergy.com
16
Reconciliation: Net Income and diluted EPS to the Basis Used
in Providing Annual Earnings Guidance
($MM)
($MM)
Note: For information on non-GAAP measures, please refer to slide 2
Quarter Ended
Quarter Ended
March 31, 2015
March 31, 2014
Net Income
EPS
Net Income
EPS
Consolidated as reported
131
$
0.30
$
185
$
0.43
$
Midstream Investments as reported
(33)
(0.08)
$
(57)
(0.13)
$
Utility Operations
(1)
as reported
98
$
0.22
$
128
$
0.30
$
Timing effects impacting CES
(2)
:
Mark-to-market (gain) losses
3
0.01
$
(2)
(0.01)
$
ZENS-related mark-to-market (gains) losses:
Marketable securities
(3)
11
0.03
$
19
0.04
$
Indexed debt securities
(16)
(0.04)
$
(28)
(0.06)
$
Utility operations earnings on an adjusted guidance basis
96
$
0.22
$
117
$
0.27
$
Per the basis used in providing earnings guidance:
Utility Operations on a guidance basis
96
0.22
$
117
0.27
$
Midstream Investments
33
0.08
$
57
0.13
$
Consolidated on a guidance basis
129
$
0.30
$
174
$
0.40
$
(1)
CenterPoint earnings excluding Midstream Investments
(2)
Energy Services segment
(3)
Time Warner Inc., Time Warner Cable Inc., Time Inc. and AOL Inc.
|