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Exhibit 99.1

 

LOGO      

For more information contact

Media:

Leticia Lowe

Phone    713.207.7702

Investors:

David Mordy

Phone    713.207.6500

For Immediate Distribution

 

 

CenterPoint Energy reports third quarter 2016 earnings of $0.41 per diluted share and updates full year guidance to $1.16 - $1.20

 

    Strong utility performance driven by customer growth and rate relief

 

    Midstream Investments expected to contribute earnings at the high end of the $0.24 - $0.28 guidance range for 2016

 

    Company continues to target 4-6% annual earnings growth through 2018

Houston, TX – November 4, 2016 - CenterPoint Energy, Inc. (NYSE: CNP) today reported net income of $179 million, or $0.41 per diluted share, for the third quarter of 2016, compared with a $391 million loss or a loss of $0.91 per diluted share for the same period of the prior year. The third quarter 2015 loss included pre-tax impairment charges totaling $862 million related to midstream investments. Excluding the impairment charges, third quarter 2015 net income would have been $146 million or $0.34 per diluted share. On a guidance basis, third quarter 2016 earnings were $0.41 per diluted share, consisting of $0.31 from utility operations and $0.10 from midstream investments. On the same guidance basis and excluding the impairment charges, third quarter 2015 earnings would have been $0.34 per diluted share, consisting of $0.24 from utility operations and $0.10 from midstream investments.

Operating income for the third quarter of 2016 was $284 million, compared with $265 million in the third quarter of the prior year. Equity income from midstream investments was $73 million for the third quarter of 2016, compared with a $794 million loss for the same period in the prior year, which includes the impairment charges noted above.

“Utility operations and midstream investments both performed well in the third quarter,” said Scott M. Prochazka, president and chief executive officer of CenterPoint Energy. “As a result, we are adjusting guidance to the higher end of the range for 2016.”

Electric Transmission & Distribution

The electric transmission & distribution segment reported operating income of $257 million for the third quarter of 2016, consisting of $234 million from the regulated electric transmission & distribution utility operations (TDU) and $23 million related to securitization bonds. Operating income for the third quarter of 2015 was $244 million, consisting of $219 million from the TDU and $25 million related to securitization bonds.

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Operating income for the TDU benefited primarily from rate relief, customer growth and higher equity return, primarily related to true-up proceeds. These benefits were partially offset by higher depreciation and other taxes.

Natural Gas Distribution

The natural gas distribution segment reported operating income of $22 million for the third quarter of 2016, compared with $11 million for the same period of 2015. Operating income benefited from rate relief, revenue from decoupling mechanisms, lower bad debt expense and lower sales and use tax. These benefits were partially offset by higher depreciation and increased labor and benefit expenses.

Energy Services

The energy services segment reported operating income of $5 million for the third quarter of 2016 compared with $7 million for the same period in the prior year. Third quarter operating income for 2016 included a mark-to-market accounting loss of $2 million, compared to a gain of $5 million for the same period of the prior year. Excluding mark-to-market adjustments, operating income would have been $7 million in the third quarter of 2016 and $2 million in the third quarter of 2015.    

Midstream Investments

The midstream investments segment reported $73 million of equity income for the third quarter of 2016, compared with a $794 million loss in the third quarter of the prior year, which includes the impairment charges noted above. For the third quarter of 2015, the impairments were partially offset by equity earnings of $68 million.

Enable Midstream declared a quarterly cash distribution of $0.318 per common and subordinated unit on November 1, 2016. Please refer to Enable Midstream’s November 2, 2016 earnings press release for details.

Dividend Declaration

On October 27, 2016, CenterPoint Energy’s board of directors declared a regular quarterly cash dividend of $0.2575 per share of common stock payable on December 9, 2016, to shareholders of record as of the close of business on November 16, 2016.

Outlook for 2016

On a consolidated basis, CenterPoint Energy updates earnings on a guidance basis for 2016 to the range of $1.16 – $1.20 per diluted share.

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The guidance range considers utility operations 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 uses a non-GAAP measure of adjusted diluted earnings per share that does not consider other potential impacts, such as changes in accounting standards or unusual items, earnings or losses 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 Services business.

In providing guidance, the company assumes for midstream investments a 55.4 percent limited partner ownership interest in Enable Midstream and includes the amortization of CenterPoint Energy’s basis difference in Enable Midstream. CenterPoint Energy’s guidance takes into account such factors as Enable Midstream’s most recent public outlook for 2016, dated November 2, 2016, 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.

 

3


CenterPoint Energy, Inc. and Subsidiaries Reconciliation of Net Income

and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS used in providing annual earnings guidance

 

     Quarter Ended     Nine Months Ended  
     September 30, 2016     September 30, 2016  
     Net Income
(in millions)
    Diluted
EPS
    Net Income
(in millions)
    Diluted
EPS
 

Consolidated net income and diluted EPS as reported

   $ 179      $ 0.41      $ 331      $ 0.76   

Midstream Investments

     (46     (0.10     (96     (0.22
  

 

 

   

 

 

   

 

 

   

 

 

 

Utility Operations (1)

     133        0.31        235        0.54   
  

 

 

   

 

 

   

 

 

   

 

 

 

Timing effects impacting CES(2):

        

Mark-to-market losses (net of taxes of $1 and $7)(3)

     1        —          11        0.02   

ZENS-related mark-to-market (gains) losses:

        

Marketable securities (net of taxes of $27 and $65) (3)(4)

     (50     (0.11     (122     (0.27

Indexed debt securities (net of taxes of $25 and $90) (3)(5)

     47        0.11        168        0.39   
  

 

 

   

 

 

   

 

 

   

 

 

 

Utility operations earnings on an adjusted guidance basis

   $ 131      $ 0.31      $ 292      $ 0.68   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income and adjusted diluted EPS used in providing earnings guidance:

        

Utility Operations on a guidance basis

   $ 131      $ 0.31      $ 292      $ 0.68   

Midstream Investments

     46        0.10        96        0.22   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated on a guidance basis

   $ 177      $ 0.41      $ 388      $ 0.90   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) CenterPoint earnings excluding Midstream Investments
(2) Energy Services segment
(3) Taxes are computed based on the impact removing such item would have on tax expense
(4) As of May 18, 2016, comprised of Time Warner Inc., Charter Communications, Inc. and Time Inc. Prior to May 18, 2016, comprised of Time Warner Inc., Time Warner Cable Inc. and Time Inc.
(5) Nine months ended results include amount associated with the Charter Communications, Inc. and Time Warner Cable Inc. merger

 

4


CenterPoint Energy, Inc. and Subsidiaries Reconciliation of Net Income (Loss)

and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS used in providing annual earnings guidance

 

     Quarter Ended  
     September 30, 2016     September 30, 2015  
     Net Income
(in millions)
    Diluted EPS     Net Income
(in millions)
    Diluted EPS  

Consolidated as reported

   $ 179      $ 0.41      $ (391   $ (0.91

Midstream Investments

     (46     (0.10     495        1.15   
  

 

 

   

 

 

   

 

 

   

 

 

 

Utility Operations (1)

     133        0.31        104        0.24   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss on impairment of Midstream Investments:

        

CenterPoint’s impairment of its investment in Enable (net of taxes of $94)(3)

     —          —          156        0.36   

CenterPoint’s share of Enable’s impairment of its goodwill and long-lived assets (net of taxes of $231)(3)

     —          —          381        0.89   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total loss on impairment

     —          —          537        1.25   
  

 

 

   

 

 

   

 

 

   

 

 

 

Midstream Investments excluding loss on impairment

     46        0.10        42        0.10   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated excluding loss on impairment

     179        0.41        146        0.34   
  

 

 

   

 

 

   

 

 

   

 

 

 

Timing effects impacting CES(2):

        

Mark-to-market (gains) losses (net of taxes of $1 and $2)(3)

     1        —          (3     (0.01

ZENS-related mark-to-market (gains) losses:

        

Marketable securities (net of taxes of $27 and $47) (3)(4)

     (50     (0.11     87        0.20   

Indexed debt securities (net of taxes of $25 and $45) (3)

     47        0.11        (84     (0.19
  

 

 

   

 

 

   

 

 

   

 

 

 

Utility operations earnings on an adjusted guidance basis

   $ 131      $ 0.31      $ 104      $ 0.24   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income and adjusted diluted EPS used in providing earnings guidance:

        

Utility Operations on a guidance basis

   $ 131      $ 0.31      $ 104      $ 0.24   

Midstream Investments excluding loss on impairment

     46        0.10        42        0.10   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated on a guidance basis

   $ 177      $ 0.41      $ 146      $ 0.34   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) CenterPoint earnings excluding Midstream Investments
(2)  Energy Services segment
(3)  Taxes are computed based on the impact removing such item would have on tax expense
(4) As of May 18, 2016, comprised of Time Warner Inc., Charter Communications, Inc. and Time Inc. Prior to May 18, 2016, comprised of Time Warner Inc., Time Warner Cable Inc. and Time Inc.

 

5


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 September 30, 2016. 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 Friday, November 4, 2016 at 10 a.m. Central time or 11 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 7,800 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, targeted dividend growth rate 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) recording of non-cash goodwill, long-lived asset or other than temporary impairment charges by or related to Enable Midstream; (4) timely and appropriate rate actions that allow 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, and the effects of geographic and seasonal commodity price differentials, and the impact of commodity changes on producer related activities; (9) weather variations and other natural phenomena, including the impact on operations and capital from severe weather events; (10) 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; (11) the impact of unplanned facility outages; (12) timely and appropriate regulatory actions allowing securitization or other recovery of costs associated with any future hurricanes or natural disasters; (13) changes in interest rates or rates of inflation; (14) 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; (15) actions by credit rating agencies; (16) effectiveness of CenterPoint Energy’s risk management activities; (17) inability of various counterparties to meet their obligations; (18) non-payment for services due to financial distress of CenterPoint Energy’s and Enable Midstream’s customers; (19) 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; (20) the ability of retail electric providers, and particularly the largest customers of the TDU, to satisfy their obligations

 

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to CenterPoint Energy and its subsidiaries; (21) the outcome of litigation; (22) CenterPoint Energy’s ability to control costs, invest planned capital, or execute growth projects; (23) the investment performance of pension and postretirement benefit plans; (24) 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; (25) acquisition and merger activities and successful integration of such activities, involving CenterPoint Energy or its competitors; (26) the ability to recruit, effectively transition and retain management and key employees and maintain good labor relations; (27) future economic conditions in regional and national markets and their effects on sales, prices and costs; (28) 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 crude oil, 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; (29) effective tax rate; (30) the effect of changes in and application of accounting standards and pronouncements; (31) other factors discussed in CenterPoint Energy’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as well as in CenterPoint Energy’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, June 30, 2016 and September 30, 2016 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 by CenterPoint Energy in Providing Guidance

In addition to presenting its financial results in accordance with generally accepted accounting principles (GAAP), including presentation of net income and diluted earnings per share, CenterPoint Energy also provides guidance based on adjusted net income and adjusted diluted earnings per share, which are non-GAAP financial measures. 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. CenterPoint Energy’s adjusted net income and adjusted diluted earnings per share calculation excludes from net income and diluted earnings per share, respectively, the impact of ZENS and related securities, mark-to-market gains or losses resulting from the company’s Energy Services business and adjustments for impairment charges. A reconciliation of net income and diluted earnings per share to the basis used in providing 2016 guidance is provided in this news release. CenterPoint Energy is unable to present a quantitative reconciliation of forward looking adjusted net income and adjusted diluted earnings per share because changes in the value of ZENS and related securities, mark-to-market gains or losses resulting from the company’s Energy Services business and impairment charges are not estimable.

Management evaluates the company’s financial performance in part based on adjusted net income and adjusted diluted earnings per share. We believe that presenting these non-GAAP financial measures 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. The adjustments made in these non-GAAP financial measures exclude items that Management believes does not most accurately reflect the company’s fundamental business performance. These excluded items are reflected in the reconciliation tables of this news release, where applicable. CenterPoint Energy’s adjusted net income and adjusted diluted earnings per share non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, net income and diluted earnings per share, which respectively are the most directly comparable GAAP financial measures. These non-GAAP financial measures also may be different than non-GAAP financial measures used by other companies.

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7


CenterPoint Energy, Inc. and Subsidiaries

Statements of Consolidated Income

(Millions of Dollars)

(Unaudited)

 

     Quarter Ended     Nine Months Ended  
     September 30,     September 30,  
     2016     2015     2016     2015  

Revenues:

        

Electric Transmission & Distribution

   $ 908      $ 827      $ 2,331      $ 2,144   

Natural Gas Distribution

     377        359        1,693        1,979   

Energy Services

     614        452        1,450        1,510   

Other Operations

     3        4        11        11   

Eliminations

     (13     (12     (38     (49
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     1,889        1,630        5,447        5,595   
  

 

 

   

 

 

   

 

 

   

 

 

 

Expenses:

        

Natural gas

     683        527        2,031        2,410   

Operation and maintenance

     505        479        1,539        1,465   

Depreciation and amortization

     324        268        873        724   

Taxes other than income taxes

     93        91        288        289   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     1,605        1,365        4,731        4,888   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Income

     284        265        716        707   
  

 

 

   

 

 

   

 

 

   

 

 

 

Other Income (Expense) :

        

Gain (loss) on marketable securities

     77        (134     187        (72

Gain (loss) on indexed debt securities

     (72     129        (258     62   

Interest and other finance charges

     (83     (88     (256     (266

Interest on securitization bonds

     (23     (25     (70     (80

Equity in earnings (losses) of unconsolidated affiliate

     73        (794     164        (699

Other - net

     20        12        41        36   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     (8     (900     (192     (1,019
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (Loss) Before Income Taxes

     276        (635     524        (312

Income Tax Expense (Benefit)

     97        (244     193        (129
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income (Loss)

   $ 179      $ (391   $ 331      $ (183
  

 

 

   

 

 

   

 

 

   

 

 

 

Reference is made to the Notes to the Consolidated Financial Statements

contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

 

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CenterPoint Energy, Inc. and Subsidiaries

Selected Data From Statements of Consolidated Income

(Millions of Dollars, Except Share and Per Share Amounts)

(Unaudited)

 

     Quarter Ended     Nine Months Ended  
     September 30,     September 30,  
     2016      2015     2016      2015  

Basic Earnings (Loss) Per Common Share

   $ 0.42       $ (0.91   $ 0.77       $ (0.43
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted Earnings (Loss) Per Common Share

   $ 0.41       $ (0.91   $ 0.76       $ (0.43
  

 

 

    

 

 

   

 

 

    

 

 

 

Dividends Declared per Common Share

   $ 0.2575       $ 0.2475        0.7725       $ 0.7425   

Weighted Average Common Shares Outstanding (000):

          

- Basic

     430,682         430,262        430,581         430,152   

- Diluted

     433,396         430,262        433,295         430,152   

Operating Income by Segment

          

Electric Transmission & Distribution:

          

TDU

   $ 234       $ 219      $ 428       $ 418   

Bond Companies

     23         25        70         80   
  

 

 

    

 

 

   

 

 

    

 

 

 

Total Electric Transmission & Distribution

     257         244        498         498   

Natural Gas Distribution

     22         11        202         176   

Energy Services

     5         7        11         29   

Other Operations

     —           3        5         4   
  

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 284       $ 265      $ 716       $ 707   
  

 

 

    

 

 

   

 

 

    

 

 

 

Reference is made to the Notes to the Consolidated Financial Statements

contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

 

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CenterPoint Energy, Inc. and Subsidiaries

Results of Operations by Segment

(Millions of Dollars)

(Unaudited)

 

    Electric Transmission & Distribution  
    Quarter Ended           Nine Months Ended        
    September 30,     % Diff     September 30,     % Diff  
    2016     2015     Fav/(Unfav)     2016     2015     Fav/(Unfav)  

Results of Operations:

           

Revenues:

           

TDU

  $ 725      $ 683        6   $ 1,881      $ 1,782        6

Bond Companies

    183        144        27     450        362        24
 

 

 

   

 

 

     

 

 

   

 

 

   

Total

    908        827        10     2,331        2,144        9
 

 

 

   

 

 

     

 

 

   

 

 

   

Expenses:

           

Operation and maintenance. excluding Bond Companies

    336        322        (4 %)      995        944        (5 %) 

Depreciation and amortization, excluding Bond Companies

    96        86        (12 %)      285        253        (13 %) 

Taxes other than income taxes

    59        56        (5 %)      173        167        (4 %) 

Bond Companies

    160        119        (34 %)      380        282        (35 %) 
 

 

 

   

 

 

     

 

 

   

 

 

   

Total

    651        583        (12 %)      1,833        1,646        (11 %) 
 

 

 

   

 

 

     

 

 

   

 

 

   

Operating Income

  $ 257      $ 244        5   $ 498      $ 498        —     
 

 

 

   

 

 

     

 

 

   

 

 

   

Operating Income:

           

TDU

  $ 234      $ 219        7   $ 428      $ 418        2

Bond Companies

    23        25        (8 %)      70        80        (13 %) 
 

 

 

   

 

 

     

 

 

   

 

 

   

Total Segment Operating Income

  $ 257      $ 244        5   $ 498      $ 498        —     
 

 

 

   

 

 

     

 

 

   

 

 

   

Electric Transmission & Distribution Operating Data:

       

Actual MWH Delivered

           

Residential

    10,775,739        10,387,735        4     23,426,712        23,283,969        1

Total

    26,517,635        25,612,134        4     66,838,583        65,378,208        2

Weather (average for service area):

           

Percentage of 10-year average:

           

Cooling degree days

    107     101     6     101     99     2

Heating degree days

    0     0     0     85     130     (45 %) 

Number of metered customers - end of period:

           

Residential

    2,116,312        2,069,213        2     2,116,312        2,069,213        2

Total

    2,389,014        2,337,806        2     2,389,014        2,337,806        2
    Natural Gas Distribution  
    Quarter Ended           Nine Months Ended        
    September 30,     % Diff     September 30,     % Diff  
    2016     2015     Fav/(Unfav)     2016     2015     Fav/(Unfav)  

Results of Operations:

           

Revenues

  $ 377      $ 359        5   $ 1,693      $ 1,979        (14 %) 

Natural gas

    104        106        2     679        1,014        33
 

 

 

   

 

 

     

 

 

   

 

 

   

Gross Margin

    273        253        8     1,014        965        5
 

 

 

   

 

 

     

 

 

   

 

 

   

Expenses:

           

Operation and maintenance

    159        155        (3 %)      526        510        (3 %) 

Depreciation and amortization

    61        55        (11 %)      180        165        (9 %) 

Taxes other than income taxes

    31        32        3     106        114        7
 

 

 

   

 

 

     

 

 

   

 

 

   

Total

    251        242        (4 %)      812        789        (3 %) 
 

 

 

   

 

 

     

 

 

   

 

 

   

Operating Income

  $ 22      $ 11        100   $ 202      $ 176        15
 

 

 

   

 

 

     

 

 

   

 

 

   

Natural Gas Distribution Operating Data:

           

Throughput data in BCF

           

Residential

    12        12        —          105        128        (18 %) 

Commercial and Industrial

    51        52        (2 %)      193        196        (2 %) 
 

 

 

   

 

 

     

 

 

   

 

 

   

Total Throughput

    63        64        (2 %)      298        324        (8 %) 
 

 

 

   

 

 

     

 

 

   

 

 

   

Weather (average for service area)

           

Percentage of 10-year average:

           

Heating degree days

    21     64     (43 %)      86     108     (22 %) 

Number of customers - end of period:

           

Residential

    3,143,357        3,110,645        1     3,143,357        3,110,645        1

Commercial and Industrial

    251,043        248,911        1     251,043        248,911        1
 

 

 

   

 

 

     

 

 

   

 

 

   

Total

    3,394,400        3,359,556        1     3,394,400        3,359,556        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.

 

10


CenterPoint Energy, Inc. and Subsidiaries

Results of Operations by Segment

(Millions of Dollars)

(Unaudited)

 

     Energy Services  
     Quarter Ended            Nine Months Ended         
     September 30,      % Diff     September 30,      % Diff  
     2016     2015      Fav/(Unfav)     2016     2015      Fav/(Unfav)  

Results of Operations:

              

Revenues

   $ 614      $ 452         36   $ 1,450      $ 1,510         (4 %) 

Natural gas

     591        433         (36 %)      1,389        1,445         4
  

 

 

   

 

 

      

 

 

   

 

 

    

Gross Margin

     23        19         21     61        65         (6 %) 
  

 

 

   

 

 

      

 

 

   

 

 

    

Expenses:

              

Operation and maintenance

     16        11         (45 %)      43        32         (34 %) 

Depreciation and amortization

     1        1         —          5        3         (67 %) 

Taxes other than income taxes

     1        —           —          2        1         (100 %) 
  

 

 

   

 

 

      

 

 

   

 

 

    

Total

     18        12         (50 %)      50        36         (39 %) 
  

 

 

   

 

 

      

 

 

   

 

 

    

Operating Income

   $ 5      $ 7         (29 %)    $ 11      $ 29         (62 %) 
  

 

 

   

 

 

      

 

 

   

 

 

    

Mark-to-market gain (loss)

   $ (2   $ 5         (140 %)    $ (18   $ 3         (700 %) 
  

 

 

   

 

 

      

 

 

   

 

 

    

Energy Services Operating Data:

              

Throughput data in BCF

     200        138         45     570        459         24
  

 

 

   

 

 

      

 

 

   

 

 

    

Number of customers - end of period

     31,669        18,052         75     31,669        18,052         75
  

 

 

   

 

 

      

 

 

   

 

 

    
     Other Operations  
     Quarter Ended            Nine Months Ended         
     September 30,      % Diff     September 30,      % Diff  
     2016     2015      Fav/(Unfav)     2016     2015      Fav/(Unfav)  

Results of Operations:

              

Revenues

   $ 3      $ 4         (25 %)    $ 11      $ 11         —     

Expenses

     3        1         (200 %)      6        7         14
  

 

 

   

 

 

      

 

 

   

 

 

    

Operating Income

   $ —        $ 3         —        $ 5      $ 4         25
  

 

 

   

 

 

      

 

 

   

 

 

    

Capital Expenditures by Segment

(Millions of Dollars)

(Unaudited)

 

                                           
     Quarter Ended      Nine Months Ended  
     September 30,      September 30,  
     2016      2015      2016      2015  

Capital Expenditures by Segment

           

Electric Transmission & Distribution

   $ 211       $ 237       $ 638       $ 665   

Natural Gas Distribution

     143         172         371         416   

Energy Services

     1         3         3         4   

Other Operations

     6         12         16         29   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 361       $ 424       $ 1,028       $ 1,114   
  

 

 

    

 

 

    

 

 

    

 

 

 
Interest Expense Detail  
(Millions of Dollars)  
(Unaudited)  
     Quarter Ended      Nine Months Ended  
     September 30,      September 30,  
     2016      2015      2016      2015  

Interest Expense Detail

           

Amortization of Deferred Financing Cost

   $ 6       $ 6       $ 18       $ 19   

Capitalization of Interest Cost

     (2      (2      (5      (7

Transition and System Restoration Bond Interest Expense

     23         25         70         80   

Other Interest Expense

     79         84         243         254   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Interest Expense

   $ 106       $ 113       $ 326       $ 346   
  

 

 

    

 

 

    

 

 

    

 

 

 

Reference is made to the Notes to the Consolidated Financial Statements

contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

 

11


CenterPoint Energy, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Millions of Dollars)

(Unaudited)

 

     September 30,      December 31,  
     2016      2015  
ASSETS      

Current Assets:

     

Cash and cash equivalents

   $ 270       $ 264   

Other current assets

     2,259         2,425   
  

 

 

    

 

 

 

Total current assets

     2,529         2,689   
  

 

 

    

 

 

 

Property, Plant and Equipment, net

     12,083         11,537   
  

 

 

    

 

 

 

Other Assets:

     

Goodwill

     862         840   

Regulatory assets

     2,756         3,129   

Investment in unconsolidated affiliate

     2,535         2,594   

Preferred units – unconsolidated affiliate

     363         —     

Other non-current assets

     158         501   
  

 

 

    

 

 

 

Total other assets

     6,674         7,064   
  

 

 

    

 

 

 

Total Assets

   $ 21,286       $ 21,290   
  

 

 

    

 

 

 
LIABILITIES AND SHAREHOLDERS’ EQUITY      

Current Liabilities:

     

Short-term borrowings

   $ 43       $ 40   

Current portion of securitization bonds long-term debt

     410         391   

Indexed debt

     112         145   

Current portion of other long-term debt

     250         328   

Other current liabilities

     1,583         1,554   
  

 

 

    

 

 

 

Total current liabilities

     2,398         2,458   
  

 

 

    

 

 

 

Other Liabilities:

     

Accumulated deferred income taxes, net

     5,206         5,047   

Regulatory liabilities

     1,279         1,276   

Other non-current liabilities

     1,195         1,182   
  

 

 

    

 

 

 

Total other liabilities

     7,680         7,505   
  

 

 

    

 

 

 

Long-term Debt:

     

Securitization bonds

     1,931         2,276   

Other

     5,805         5,590   
  

 

 

    

 

 

 

Total long-term debt

     7,736         7,866   
  

 

 

    

 

 

 

Shareholders’ Equity

     3,472         3,461   
  

 

 

    

 

 

 

Total Liabilities and Shareholders’ Equity

   $ 21,286       $ 21,290   
  

 

 

    

 

 

 

Reference is made to the Notes to the Consolidated Financial Statements

contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

 

12


CenterPoint Energy, Inc. and Subsidiaries

Condensed Statements of Consolidated Cash Flows

(Millions of Dollars)

(Unaudited)

 

     Nine Months Ended September 30,  
     2016     2015  

Cash Flows from Operating Activities:

    

Net income (loss)

   $ 331      $ (183

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

    

Depreciation and amortization

     892        745   

Deferred income taxes

     150        (264

Write-down of natural gas inventory

     1        4   

Equity in (earnings) losses of unconsolidated affiliate, net of distributions

     (164     843   

Changes in net regulatory assets

     (26     92   

Changes in other assets and liabilities

     252        266   

Other, net

     16        15   
  

 

 

   

 

 

 

Net Cash Provided by Operating Activities

     1,452        1,518   

Net Cash Used in Investing Activities

     (739     (1,024

Net Cash Used in Financing Activities

     (707     (565
  

 

 

   

 

 

 

Net Increase (Decrease) in Cash and Cash Equivalents

     6        (71

Cash and Cash Equivalents at Beginning of Period

     264        298   
  

 

 

   

 

 

 

Cash and Cash Equivalents at End of Period

   $ 270      $ 227   
  

 

 

   

 

 

 

Reference is made to the Notes to the Consolidated Financial Statements

contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

 

13