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  3. CenterPoint Energy Reports Q2 2020 Earnings of $0.11 Per Diluted Share; $0.21 Diluted EPS on a Guidance Basis, with $0.18 Diluted EPS from Utility Operations, Inclusive of $0.06 COVID-19 Impact, & $0.03 Diluted EPS from Midstream Investments

CenterPoint Energy Reports Q2 2020 Earnings of $0.11 Per Diluted Share; $0.21 Diluted EPS on a Guidance Basis, with $0.18 Diluted EPS from Utility Operations, Inclusive of $0.06 COVID-19 Impact, and $0.03 Diluted EPS from Midstream Investments


News Release

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Aug 06, 2020

CenterPoint Energy Reports Q2 2020 Earnings of $0.11 Per Diluted Share; $0.21 Diluted EPS on a Guidance Basis, with $0.18 Diluted EPS from Utility Operations, Inclusive of $0.06 COVID-19 Impact, and $0.03 Diluted EPS from Midstream Investments

  • Utilities led company with strong second quarter results in spite of $0.06 COVID-19 impact
  • Reiterate 2020 Utility EPS guidance range of $1.10 - $1.20 and 5 - 7% Utility EPS CAGR, inclusive of anticipated COVID-19 impacts

HOUSTON--(BUSINESS WIRE)--Aug. 6, 2020-- CenterPoint Energy, Inc. (NYSE: CNP) today reported income available to common shareholders of $59 million, or $0.11 per diluted share, for the second quarter of 2020, compared to income available to common shareholders of $165 million, or $0.33 per diluted share, for the second quarter of 2019.

On a guidance basis, second quarter 2020 earnings were $0.21 per diluted share, with $0.18 per diluted share from utility operations, inclusive of $0.06 unfavorable COVID-19 impact, and $0.03 per diluted share from midstream investments. Second quarter 2019 earnings, on a guidance basis, were $0.23 per diluted share from utility operations and $0.09 per diluted share from midstream investments. See “Reconciliation of Consolidated income (loss) available to common shareholders and diluted earnings (loss) per share (GAAP) to adjusted income and adjusted diluted earnings per share (Non-GAAP)” below.

“Our second quarter results demonstrate our employees’ resilience and dedication to safely serving our customers during these unique and challenging times,” said Dave Lesar, President and Chief Executive Officer of CenterPoint Energy. “I would especially like to thank our operations personnel for their unwavering commitment and tireless efforts to deliver on CenterPoint Energy’s brand promise of being ‘Always There’ for our customers.

"Despite the challenges brought on by COVID-19, our utilities delivered strong second quarter results driven by customer growth, rate relief and disciplined O&M management," said Lesar. "We are reiterating CenterPoint Energy's 2020 Utility EPS guidance range of $1.10 - $1.20 and expected 5 - 7% 5-year guidance basis Utility EPS CAGR, including the anticipated full year impacts of $0.10 - $0.15 related to COVID-19."

Lesar added, "As CEO and also Chairman of the Business Review and Evaluation Committee of the Board (the "Committee"), I am driving a process dedicated to thoroughly assessing opportunities to accomplish the objective of creating sustainable value for our stakeholders. The comprehensive review by the Committee is an on-going and robust process to unlock the potential of our Company, business and investments. Formal recommendations to the Board are expected in October 2020.

"I believe that CenterPoint Energy is a strong company with great regulated assets and attractive opportunities to invest incremental capital across premier organic growth jurisdictions," said Lesar. "I am greatly energized about the future of this company and will work tirelessly to drive maximum value for all of our stakeholders."

Business Segments

Houston Electric - Transmission & Distribution

The Houston electric - transmission & distribution segment reported net income of $87 million for the second quarter of 2020, compared with $100 million for the second quarter of 2019. Net income for the second quarter of 2020 included $2 million of after-tax merger-related expenses. On a guidance basis, second quarter 2020 net income was $89 million, compared with $100 million for the second quarter of 2019. Results for the second quarter of 2020 benefited primarily from customer growth and lower operations and maintenance expense. These benefits were more than offset by lower commercial and industrial usage, primarily due to the effects of COVID-19, increased depreciation and amortization and other taxes expense, lower equity return, primarily due to the annual true-up of transition charges, and lower net revenues as a result of the most recent Houston Electric rate case.

Indiana Electric – Integrated

The Indiana electric - integrated segment reported net income of $19 million for the second quarter of 2020, compared with $16 million for the second quarter of 2019. Results for the second quarter of 2020 benefited primarily from lower operations and maintenance expense, partially offset by lower usage, primarily due to the effects of COVID-19.

Natural Gas Distribution

The natural gas distribution segment reported net income of $33 million for the second quarter of 2020, compared with $23 million for the second quarter of 2019. Net income for the second quarter of 2020 includes $2 million of after-tax merger-related expenses and severance costs. On a guidance basis, second quarter 2020 net income was $35 million, compared with $23 million for the second quarter of 2019. Results for the second quarter of 2020 benefited primarily from rate relief, lower operations and maintenance expense and customer growth. These increases were partially offset by lower usage and miscellaneous fee revenues due to the effects of COVID-19 and increased depreciation and amortization and other taxes expense.

Midstream Investments

The midstream investments segment reported net income of $24 million for the second quarter of 2020, compared with $50 million for the second quarter of 2019. For further detail, please refer to Enable's investor materials provided during its second quarter 2020 earnings call on August 5, 2020.

Corporate and Other

The corporate and other segment reported a net loss of $28 million for the second quarter of 2020, compared with a net loss of $38 million for the second quarter of 2019. The net loss for the second quarter of 2020 included $5 million of after-tax merger-related expenses and severance costs. The net loss for the second quarter of 2019 included $27 million of after-tax merger-related expenses.

Discontinued Operations - Energy Services and Infrastructure Services

Discontinued operations reported a net loss of $30 million for the second quarter of 2020, compared with net income of $44 million for the second quarter of 2019. Results related to discontinued operations are excluded from the company's guidance basis results.

Earnings Outlook

To provide greater transparency on utility earnings, 2020 guidance will be presented in two components, a guidance basis Utility EPS range and a Midstream Investments EPS expected range.

  • Reiterate 2020 guidance basis Utility EPS range of $1.10 - $1.20
  • 2020 - 2024 target of 5 - 7% compound annual guidance basis Utility EPS growth, using the 2020 range of $1.10 - $1.20 as the starting EPS, assuming the COVID-19 scenario range described below
  • 2020 Midstream Investments EPS expected range is $0.15 - $0.18

Utility EPS Guidance Range

  • Utility EPS guidance range includes net income from Houston Electric, Indiana Electric and Natural Gas Distribution segments, as well as after tax operating income from the Corporate and Other segment.
  • The 2020 Utility EPS guidance range considers operations performance to date and assumptions for certain significant variables that may impact earnings, such as customer growth (approximately 2% for electric operations and 1% for natural gas distribution) and usage including normal weather, throughput, recovery of capital invested through rate cases and other rate filings, effective tax rates, financing activities and related interest rates, regulatory and judicial proceedings, anticipated cost savings as a result of the merger and reflects dilution and earnings as if the Series C preferred stock were issued as common stock. In addition, the Utility EPS guidance range incorporates a COVID-19 scenario range of $0.10 - $0.15 which assumes reduced demand levels and miscellaneous revenues with the second quarter as the peak and reflects anticipated deferral and recovery of certain incremental expenses, including bad debt. The COVID-19 scenario range also assumes a gradual re-opening of the economy in CenterPoint Energy's service territories, with anticipated reduced demand and lower miscellaneous revenues over the remainder of 2020. To the extent actual recovery deviates from these COVID-19 scenario range assumptions, the 2020 Utility EPS guidance range may not be met and our projected full-year guidance range may change. The Utility EPS guidance range also assumes an allocation of corporate overhead based upon its relative earnings contribution. Corporate overhead consists of interest expense, preferred stock dividend requirements, income on Enable preferred units and other items directly attributable to the parent along with the associated income taxes.
  • Utility EPS guidance excludes:
    • Certain expenses associated with merger integration and Business Review and Evaluation Committee activities
    • Severance costs
    • Midstream Investments and allocation of associated corporate overhead
    • Results related to Infrastructure Services and Energy Services, including costs and impairment resulting from the sale of those businesses
    • Earnings or losses from the change in value of ZENS and related securities

In providing this 2020 guidance, CenterPoint Energy uses a non-GAAP measure of adjusted diluted earnings per share that does not consider the items noted above and other potential impacts such as any changes in accounting standards, impairments or other unusual items, which could have a material impact on GAAP reported results for the applicable guidance period. CenterPoint Energy is unable to present a quantitative reconciliation of forward looking adjusted diluted earnings per share because changes in the value of ZENS and related securities are not estimable as they are highly variable and difficult to predict due to various factors outside of management’s control.

Midstream Investments EPS Expected Range

The 2020 Midstream Investments EPS expected range is $0.15 - $0.18. In providing this EPS range for Midstream Investments, the company assumes a 53.7 percent ownership of Enable's common units and includes the amortization of its basis differential in Enable and assumes an allocation of CenterPoint Energy corporate overhead based upon Midstream Investments relative earnings contribution. The Midstream Investments EPS expected range reflects dilution and earnings as if CenterPoint Energy's Series C preferred stock were issued as common stock. The Midstream Investments EPS expected range takes into account such factors as Enable’s most recent public outlook for 2020 dated August 5, 2020, and effective tax rates. The company does not include other potential impacts such as any changes in accounting standards, impairments or Enable’s unusual items.

 

Reconciliation of Consolidated income (loss) available to common shareholders and diluted earnings (loss) per share (GAAP) to adjusted income and adjusted diluted earnings per share (Non-GAAP)

Quarter Ended

June 30, 2020

 

Utility Operations

 

Midstream
Investments

 

Corporate and
Other (6)

 

CES(1) & CIS(2)
(Disc. Operations)

 

Consolidated

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

Consolidated income (loss) available to common shareholders and diluted EPS

$

139

 

$

0.26

 

 

$

24

 

$

0.04

 

 

$

(74

)

$

(0.13

)

 

$

(30

)

$

(0.06

)

 

$

59

 

$

0.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Timing effects impacting CES (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mark-to-market (gains) losses (net of taxes of $8)(4)

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

25

 

0.05

 

 

25

 

0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable securities (net of taxes of $15)(4)(5)

—

 

—

 

 

—

 

—

 

 

(60

)

(0.12

)

 

—

 

—

 

 

(60

)

(0.12

)

Indexed debt securities (net of taxes of $15)(4)

—

 

—

 

 

—

 

—

 

 

61

 

0.12

 

 

—

 

—

 

 

61

 

0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impacts associated with the Vectren merger (net of taxes of $1, $1)(4)

3

 

—

 

 

—

 

—

 

 

4

 

0.01

 

 

—

 

—

 

 

7

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance costs (net of taxes of $0, $0)(4)

1

 

—

 

 

—

 

—

 

 

1

 

—

 

 

—

 

—

 

 

2

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impacts associated with the sales of CES (1) and CIS (2) (net of taxes of $38)(4)

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

4

 

0.01

 

 

4

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impacts associated with Series C preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock dividend requirement and amortization of beneficial conversion feature

—

 

—

 

 

—

 

—

 

 

16

 

0.03

 

 

—

 

—

 

 

16

 

0.03

 

Impact of increased share count on EPS if issued as common stock

—

 

(0.01

)

 

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

(0.01

)

Total Series C preferred stock impacts

—

 

(0.01

)

 

—

 

—

 

 

16

 

0.03

 

 

—

 

—

 

 

16

 

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated on a guidance basis

143

 

0.25

 

 

24

 

0.04

 

 

(52

)

(0.09

)

 

(1

)

—

 

 

114

 

0.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Other Allocation

(41

)

(0.07

)

 

(9

)

(0.01

)

 

52

 

0.09

 

 

(2

)

(0.01

)

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exclusion of Discontinued Operations(7)

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

3

 

0.01

 

 

3

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated on a guidance basis, with allocation of Corporate and Other

$

102

 

$

0.18

 

 

$

15

 

$

0.03

 

 

$

—

 

$

—

 

 

$

—

 

$

—

 

 

$

117

 

$

0.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Energy Services segment

(2) Infrastructure Services segment

(3) Quarterly diluted EPS on both a GAAP and guidance basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS

(4) Taxes are computed based on the impact removing such item would have on tax expense

(5) Comprised of common stock of AT&T Inc. and Charter Communications, Inc.

(6) Corporate and Other segment plus income allocated to preferred shareholders

(7) Results related to discontinued operations are excluded from the company's guidance basis results

Quarter Ended

June 30, 2019

 

Utility Operations

 

Midstream
Investments

 

Corporate and
Other (6)

 

CES(1) & CIS(2)
(Disc. Operations)

 

Consolidated

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

Consolidated income (loss) available to common shareholders and diluted EPS

$

139

 

$

0.28

 

 

$

50

 

$

0.10

 

 

$

(68

)

$

(0.14

)

 

$

44

 

$

0.09

 

 

$

165

 

$

0.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Timing effects impacting CES (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mark-to-market (gains) losses (net of taxes of $7)(4)

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

(23

)

(0.05

)

 

(23

)

(0.05

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable securities (net of taxes of $14)(4)(5)

—

 

—

 

 

—

 

—

 

 

(50

)

(0.10

)

 

—

 

—

 

 

(50

)

(0.10

)

Indexed debt securities (net of taxes of $15) (4)

—

 

—

 

 

—

 

—

 

 

53

 

0.11

 

 

—

 

—

 

 

53

 

0.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated on a guidance basis

139

 

0.28

 

 

50

 

0.10

 

 

(65

)

(0.13

)

 

21

 

0.04

 

 

145

 

0.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impacts associated with the Vectren merger (net of taxes of $8, $2)(4)

—

 

—

 

 

—

 

—

 

 

27

 

0.05

 

 

5

 

0.01

 

 

32

 

0.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated on a guidance basis, excluding impacts associated with the Vectren merger

139

 

0.28

 

 

50

 

0.10

 

 

(38

)

(0.08

)

 

26

 

0.05

 

 

177

 

0.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Other Allocation

(22

)

(0.05

)

 

(6

)

(0.01

)

 

38

 

0.08

 

 

(10

)

(0.02

)

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated on a guidance basis, excluding impacts associated with the Vectren merger and with allocation of Corporate and Other

$

117

 

$

0.23

 

 

$

44

 

$

0.09

 

 

$

—

 

$

—

 

 

$

16

 

$

0.03

 

 

$

177

 

$

0.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Energy Services segment

(2) Infrastructure Services segment

(3) Quarterly diluted EPS on both a GAAP and guidance basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS

(4) Taxes are computed based on the impact removing such item would have on tax expense

(5) Comprised of common stock of AT&T Inc. and Charter Communications, Inc.

(6) Corporate and Other segment plus income allocated to preferred shareholders

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 quarter ended June 30, 2020. A copy of that report is available on the company’s website, under the Investors section. Investors and others should note that we may announce material information using SEC filings, press releases, public conference calls, webcasts, and the Investor Relations 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.

Webcast of Earnings Conference Call

CenterPoint Energy’s management will host an earnings conference call on Thursday, August 6, 2020, at 10:00 a.m. Central time/11:00 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.

As the only investor owned electric and gas utility based in Texas, CenterPoint Energy, Inc. (NYSE: CNP) is an energy delivery company with electric transmission and distribution, power generation and natural gas distribution operations that serve more than 7 million metered customers in Arkansas, Indiana, Louisiana, Minnesota, Mississippi, Ohio, Oklahoma and Texas. As of June 30, 2020, the company owned approximately $32 billion in assets and also owned 53.7 percent of the common units representing limited partner interests in Enable Midstream Partners, LP, a publicly traded master limited partnership that owns, operates and develops strategically located natural gas and crude oil infrastructure assets. With approximately 9,600 employees, CenterPoint Energy and its predecessor companies have been in business for more than 150 years. For more information, visit CenterPointEnergy.com.

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "target," "will" or other similar words are intended to identify forward-looking statements. 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 capital investments, future earnings, and future financial performance and results of operations, including, but not limited to earnings guidance, impact of COVID-19, including with respect to regulatory actions and the COVID-19 scenario range discussed in this news release, the Business Review and Evaluation Committee activities and any outcome of its review process, value creation 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.

Risks Related to CenterPoint Energy

Important factors that could cause actual results to differ materially from those indicated by the provided forward-looking information include risks and uncertainties relating to: (1) the performance of Enable Midstream Partners, LP (Enable), the amount of cash distributions CenterPoint Energy receives from Enable, Enable's ability to redeem the Enable Series A Preferred Units in certain circumstances and the value of CenterPoint Energy's interest in Enable, and factors that may have a material impact on such performance, cash distributions and value, including factors such as: (A) competitive conditions in the midstream industry, and actions taken by Enable's customers and competitors, including drilling, production and capital spending decisions of third parties and the extent and timing of the entry of additional competition in the markets served by Enable; (B) the timing and extent of changes in the supply of natural gas and associated commodity prices, particularly prices of natural gas and natural gas liquids (NGLs), the competitive effects of the available pipeline capacity in the regions served by Enable, and the effects of geographic and seasonal commodity price differentials, including the effects of these circumstances on re-contracting available capacity on Enable's interstate pipelines and its commodity risk management activities; (C) economic effects of the recent actions of Saudi Arabia, Russia and other oil-producing countries, which have resulted in a substantial decrease in oil and natural gas prices and the combined impact of these events and COVID-19 on commodity prices; (D) the demand for crude oil, natural gas, NGLs and transportation and storage services; (E) environmental and other governmental regulations, including the availability of drilling permits and the regulation of hydraulic fracturing; (F) recording of goodwill, long-lived asset or other than temporary impairment charges by or related to Enable; (G) the timing of payments from Enable's customers under existing contracts, including minimum volume commitment payments; (H) changes in tax status; and (I) access to debt and equity capital; (2) CenterPoint Energy's expected benefits of the merger with Vectren Corporation (Vectren) and integration, including the outcome of shareholder litigation filed against Vectren that could reduce anticipated benefits of the merger, as well as the ability to successfully integrate the Vectren businesses and to realize anticipated benefits and commercial opportunities; (3) the recording of impairment charges; (4) industrial, commercial and residential growth in CenterPoint Energy's service territories and changes in market demand, including the demand for CenterPoint Energy's non-utility products and services and effects of energy efficiency measures and demographic patterns; (5) timely and appropriate rate actions that allow recovery of costs and a reasonable return on investment; (6) future economic conditions in regional and national markets and their effect on sales, prices and costs; (7) weather variations and other natural phenomena, including the impact of severe weather events on operations and capital; (8) the COVID-19 pandemic and its effect on CenterPoint Energy’s and Enable’s operations, business and financial condition, the industries and communities they serve, U.S. and world financial markets and supply chains, potential regulatory actions and changes in customer and stakeholder behaviors relating thereto; (9) volatility and a substantial recent decline in the markets for oil and natural gas as a result of the actions of crude-oil exporting nations and the Organization of Petroleum Exporting Countries and reduced worldwide consumption due to the COVID-19 pandemic; (10) state and federal legislative and regulatory actions or developments affecting various aspects of CenterPoint Energy's and Enable's businesses, including, among others, energy deregulation or re-regulation, pipeline integrity and safety and changes in regulation and legislation pertaining to trade, health care, finance and actions regarding the rates charged by our regulated businesses; (11) tax legislation, including the effects of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the comprehensive tax reform legislation informally referred to as the Tax Cuts and Jobs Act (which includes but is not limited to any potential changes to tax rates, tax credits and/or interest deductibility) and uncertainties involving state commissions' and local municipalities' regulatory requirements and determinations regarding the treatment of excess deferred income taxes and CenterPoint Energy's rates; (12) CenterPoint Energy's ability to mitigate weather impacts through normalization or rate mechanisms, and the effectiveness of such mechanisms; (13) actions by credit rating agencies, including any potential downgrades to credit ratings; (14) problems with regulatory approval, legislative actions, construction, implementation of necessary technology or other issues with respect to major capital projects that result in delays or cancellation or in cost overruns that cannot be recouped in rates; (15) the availability and prices of raw materials and services and changes in labor for current and future construction projects and operations and maintenance costs, including CenterPoint Energy's ability to control such costs; (16) local, state and federal legislative and regulatory actions or developments relating to the environment, including, among others, those related to global climate change, air emissions, carbon, waste water discharges and the handling and disposal of coal combustion residuals (CCR) that could impact the continued operation, and/or cost recovery of generation plant costs and related assets; (17) the impact of unplanned facility outages or other closures; (18) any direct or indirect effects on CenterPoint Energy's or Enable's facilities, operations and financial condition resulting from terrorism, cyber-attacks, data security breaches or other attempts to disrupt CenterPoint Energy's businesses or the businesses of third parties, or other catastrophic events such as fires, ice, earthquakes, explosions, leaks, floods, droughts, hurricanes, tornadoes, pandemic health events or other occurrences; (19) CenterPoint Energy's ability to invest planned capital and the timely recovery of CenterPoint Energy's investments, including those related to Indiana Electric's Integrated Resource Plan; (20) CenterPoint Energy's ability to successfully construct and operate electric generating facilities, including complying with applicable environmental standards and the implementation of a well-balanced energy and resource mix, as appropriate; (21) the sufficiency of CenterPoint Energy's insurance coverage, including availability, cost, coverage and terms and ability to recover claims; (22) the investment performance of CenterPoint Energy's pension and postretirement benefit plans; (23) changes in interest rates and their impact on CenterPoint Energy's costs of borrowing and the valuation of its pension benefit obligation; (24) commercial bank and financial market conditions, CenterPoint Energy's access to capital, the cost of such capital, and the results of CenterPoint Energy's financing and refinancing efforts, including availability of funds in the debt capital markets; (25) changes in rates of inflation; (26) inability of various counterparties to meet their obligations to CenterPoint Energy; (27) non-payment for CenterPoint Energy's services due to financial distress of its customers; (28) the extent and effectiveness of CenterPoint Energy's and Enable's risk management and hedging activities, including but not limited to, financial and weather hedges; (29) timely and appropriate regulatory actions, which include actions allowing securitization, for any future hurricanes or natural disasters or other recovery of costs; (30) the ability of retail electric providers (REPs), including REP affiliates of NRG Energy, Inc. and Vistra Energy Corp., formerly known as TCEH Corp., to satisfy their obligations to CenterPoint Energy and its subsidiaries; (31) CenterPoint Energy's or Enable's potential business strategies and strategic initiatives, including restructurings, joint ventures and acquisitions or dispositions of assets or businesses, which CenterPoint Energy and Enable cannot assure will be completed or will have the anticipated benefits to CenterPoint Energy or Enable; (32) acquisition and merger activities involving CenterPoint Energy or its competitors, including the ability to successfully complete merger, acquisition and divestiture plans; (33) CenterPoint Energy's or Enable's ability to recruit, effectively transition and retain management and key employees and maintain good labor relations; (34) the outcome of litigation; (35) the development of new opportunities and the performance of projects undertaken by ESG, including, among other factors, the level of success in bidding contracts and cancellation and/or reductions in the scope of projects by customers, and obligations related to warranties and guarantees; (36) changes in technology, particularly with respect to efficient battery storage or the emergence or growth of new, developing or alternative sources of generation; (37) the impact of alternate energy sources on the demand for natural gas; (38) the timing and outcome of any audits, disputes and other proceedings related to taxes; (39) the effective tax rates; (40) the transition to a replacement for the LIBOR benchmark interest rate; (41) the effect of changes in and application of accounting standards and pronouncements; and (42) other factors discussed in CenterPoint Energy’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, CenterPoint Energy’s Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 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 income (loss) available to common shareholders and diluted earnings (loss) per share, CenterPoint Energy also provides guidance based on adjusted 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.

To provide greater transparency on utility earnings, CenterPoint Energy’s 2020 guidance will be presented in two components, a guidance basis Utility EPS range and a Midstream Investments EPS expected range. The 2020 Utility EPS guidance range includes net income from Houston Electric, Indiana Electric and Natural Gas Distribution business segments, as well as after tax operating income from the Corporate and Other segment. The 2020 Utility EPS guidance range considers operations performance to date and assumptions for certain significant variables that may impact earnings, such as customer growth (approximately 2% for electric operations and 1% for natural gas distribution) and usage including normal weather, throughput, recovery of capital invested through rate cases and other rate filings, effective tax rates, financing activities and related interest rates, regulatory and judicial proceedings, anticipated cost savings as a result of the merger and reflects dilution and earnings as if the Series C preferred stock were issued as common stock. In addition, the 2020 Utility EPS guidance range incorporates a COVID-19 scenario range of $0.10 - $0.15 which assumes reduced demand levels and miscellaneous revenues with the second quarter as the peak and reflects anticipated deferral and recovery of certain incremental expenses, including bad debt. The COVID-19 scenario range also assumes a gradual re-opening of the economy in CenterPoint Energy's service territories, with anticipated reduced demand and lower miscellaneous revenues over the remainder of 2020. To the extent actual recovery deviates from these COVID-19 scenario range assumptions, the 2020 Utility EPS guidance range may not be met and our projected full-year guidance range may change. The 2020 Utility EPS guidance range also assumes an allocation of corporate overhead based upon its relative earnings contribution. Corporate overhead consists of interest expense, preferred stock dividend requirements, income on Enable preferred units and other items directly attributable to the parent along with the associated income taxes. Utility EPS guidance excludes (a) certain expenses associated with merger integration and Business Review and Evaluation Committee activities, (b) severance costs, (c) Midstream Investments and associated allocation of corporate overhead, (d) results related to Infrastructure Services and Energy Services, including costs and impairment resulting from the sale of those businesses, and (e) earnings or losses from the change in value of ZENS and related securities. In providing this guidance, CenterPoint Energy uses a non-GAAP measure of adjusted diluted earnings per share that does not consider other potential impacts, such as changes in accounting standards, impairments or unusual items, which could have a material impact on GAAP reported results for the applicable guidance period. CenterPoint Energy is unable to present a quantitative reconciliation of forward looking adjusted diluted earnings per share because changes in the value of ZENS and related securities are not estimable as they are highly variable and difficult to predict due to various factors outside of management’s control.

The 2020 Midstream Investments EPS expected range assumes a 53.7 percent ownership of Enable's common units and includes the amortization of the Company’s basis differential in Enable and assumes an allocation of CenterPoint Energy corporate overhead based upon Midstream Investments relative earnings contribution. The Midstream Investments EPS expected range reflects dilution and earnings as if the CenterPoint Energy Series C preferred stock were issued as common stock. The Midstream Investments EPS expected range takes into account such factors as Enable’s most recent public outlook for 2020 dated August 5, 2020, and effective tax rates. The company does not include other potential impacts such as any changes in accounting standards, impairments or Enable’s unusual items.

Management evaluates the company’s financial performance in part based on adjusted income and adjusted diluted earnings per share. Management believes 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 do 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 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, income available to common shareholders 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.

 

CenterPoint Energy, Inc. and Subsidiaries

Condensed Statements of Consolidated Income

(Millions of Dollars)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

Utility revenues

$

1,476

 

 

$

1,565

 

 

$

3,549

 

 

$

3,736

 

Non-utility revenues

99

 

 

93

 

 

193

 

 

151

 

Total

1,575

 

 

1,658

 

 

3,742

 

 

3,887

 

Expenses:

 

 

 

 

 

 

 

Utility natural gas, fuel and purchased power

202

 

 

260

 

 

811

 

 

1,057

 

Non-utility cost of revenues, including natural gas

69

 

 

61

 

 

133

 

 

108

 

Operation and maintenance

643

 

 

673

 

 

1,317

 

 

1,421

 

Depreciation and amortization

297

 

 

322

 

 

579

 

 

622

 

Taxes other than income taxes

129

 

 

113

 

 

265

 

 

239

 

Goodwill Impairment

—

 

 

—

 

 

185

 

 

—

 

Total

1,340

 

 

1,429

 

 

3,290

 

 

3,447

 

Operating Income

235

 

 

229

 

 

452

 

 

440

 

Other Income (Expense):

 

 

 

 

 

 

 

Gain (loss) on marketable securities

75

 

 

64

 

 

(69

)

 

147

 

Gain (loss) on indexed debt securities

(76

)

 

(68

)

 

59

 

 

(154

)

Interest expense and other finance charges

(128

)

 

(134

)

 

(267

)

 

(255

)

Interest expense on Securitization Bonds

(7

)

 

(10

)

 

(15

)

 

(22

)

Equity in earnings (loss) of unconsolidated affiliates, net

43

 

 

74

 

 

(1,432

)

 

136

 

Interest income

1

 

 

1

 

 

1

 

 

13

 

Interest income from Securitization Bonds

—

 

 

1

 

 

1

 

 

3

 

Other income, net

21

 

 

9

 

 

34

 

 

15

 

Total

(71

)

 

(63

)

 

(1,688

)

 

(117

)

Income (Loss) from Continuing Operations Before Income Taxes

164

 

 

166

 

 

(1,236

)

 

323

 

Income tax expense (benefit)

29

 

 

15

 

 

(318

)

 

29

 

Income (Loss) from Continuing Operations

135

 

 

151

 

 

(918

)

 

294

 

Income (loss) from Discontinued Operations (net of tax expense of $38, $14, $21 and $22, respectively)

(30

)

 

44

 

 

(176

)

 

70

 

Net Income (Loss)

105

 

 

195

 

 

(1,094

)

 

364

 

Income allocated to preferred shareholders

46

 

 

30

 

 

75

 

 

59

 

Income (Loss) Available to Common Shareholders

$

59

 

 

$

165

 

 

$

(1,169

)

 

$

305

 

Reference is made to the Combined Notes to Unaudited Condensed 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

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

(Unaudited)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share - continuing operations

$

0.17

 

 

$

0.24

 

 

$

(1.93

)

 

$

0.47

 

Basic earnings (loss) per common share - discontinued operations

(0.06

)

 

0.09

 

 

(0.34

)

 

0.14

 

Basic Earnings (loss) Per Common Share

$

0.11

 

 

$

0.33

 

 

$

(2.27

)

 

$

0.61

 

Diluted earnings (loss) per common share - continuing operations

$

0.17

 

 

$

0.24

 

 

$

(1.93

)

 

$

0.47

 

Diluted earnings (loss) per common share - discontinued operations

(0.06

)

 

0.09

 

 

(0.34

)

 

0.14

 

Diluted Earnings Per Common Share

$

0.11

 

 

$

0.33

 

 

$

(2.27

)

 

$

0.61

 

 

 

 

 

 

 

 

 

Dividends Declared per Common Share

$

0.1500

 

 

$

0.2875

 

 

$

0.4400

 

 

$

0.2875

 

Dividends Paid per Common Share

$

0.1500

 

 

$

0.2875

 

 

$

0.4400

 

 

$

0.5750

 

Weighted Average Common Shares Outstanding (in millions):

 

 

 

 

 

 

 

- Basic

528

 

 

502

 

 

515

 

 

502

 

- Diluted

531

 

 

505

 

 

515

 

 

504

 

 

 

 

 

 

 

 

 

Net Income (Loss) by Reportable Segment

 

 

 

 

 

 

 

Houston Electric T&D

$

87

 

 

$

100

 

 

$

124

 

 

$

130

 

Indiana Electric Integrated

19

 

 

16

 

 

(152

)

 

7

 

Natural Gas Distribution

33

 

 

23

 

 

237

 

 

143

 

Midstream Investments

24

 

 

50

 

 

(1,103

)

 

74

 

Corporate and Other

(28

)

 

(38

)

 

(24

)

 

(60

)

Income (Loss) from Continuing Operations

135

 

 

151

 

 

(918

)

 

294

 

Income (loss) from Discontinued Operations, net of tax

(30

)

 

44

 

 

(176

)

 

70

 

Net Income (Loss)

$

105

 

 

$

195

 

 

$

(1,094

)

 

$

364

 

Reference is made to the Combined Notes to Unaudited Condensed 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, Except Throughput and Customer Data)

(Unaudited)

 

Houston Electric T&D

 

Three Months Ended June 30,

 

% Diff

 

Six Months Ended June 30,

 

% Diff

 

2020

 

2019

 

Fav/Unfav

 

2020

 

2019

 

Fav/Unfav

Utility Revenues:

 

 

 

 

 

 

 

 

 

 

 

TDU

$

672

 

 

$

672

 

 

—

 

 

$

1,272

 

 

$

1,267

 

 

—

 

Bond Companies

48

 

 

93

 

 

(48

)%

 

86

 

 

187

 

 

(54

)%

Total revenues

720

 

 

765

 

 

(6

)%

 

1,358

 

 

1,454

 

 

(7

)%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Operation and maintenance, excluding Bond Companies

362

 

 

357

 

 

(1

)%

 

720

 

 

723

 

 

—

 

Depreciation and amortization, excluding Bond Companies

101

 

 

94

 

 

(7

)%

 

200

 

 

187

 

 

(7

)%

Taxes other than income taxes

64

 

 

61

 

 

(5

)%

 

128

 

 

123

 

 

(4

)%

Bond Companies

41

 

 

84

 

 

51

%

 

72

 

 

168

 

 

57

%

Total expenses

568

 

 

596

 

 

5

%

 

1,120

 

 

1,201

 

 

7

%

Operating Income

152

 

 

169

 

 

(10

)%

 

238

 

 

253

 

 

(6

)%

Other Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

Interest expense and other finance charges

(43

)

 

(42

)

 

(2

)%

 

(84

)

 

(82

)

 

(2

)%

Interest expense on Securitization Bonds

(7

)

 

(10

)

 

30

%

 

(15

)

 

(22

)

 

32

%

Interest income

—

 

 

6

 

 

—

 

 

1

 

 

10

 

 

(90

)%

Interest income from Securitization Bonds

—

 

 

1

 

 

—

 

 

1

 

 

3

 

 

(67

)%

Other income (expense), net

1

 

 

(1

)

 

200

%

 

4

 

 

(3

)

 

233

%

Income From Continuing Operations Before Income Taxes

103

 

 

123

 

 

(16

)%

 

145

 

 

159

 

 

(9

)%

Income tax expense

16

 

 

23

 

 

30

%

 

21

 

 

29

 

 

28

%

Net Income

$

87

 

 

$

100

 

 

(13

)%

 

$

124

 

 

$

130

 

 

(5

)%

Actual GWH Delivered

 

 

 

 

 

 

 

 

 

 

 

Residential

8,440

 

 

7,985

 

 

6

%

 

13,791

 

 

13,168

 

 

5

%

Total

23,160

 

 

24,018

 

 

(4

)%

 

43,262

 

 

43,037

 

 

1

%

Weather (percentage of 10-year average for service area):

 

 

 

 

 

 

 

 

 

 

 

Cooling degree days

103

%

 

103

%

 

—

%

 

113

%

 

101

%

 

12

%

Heating degree days

74

%

 

171

%

 

(97

)%

 

68

%

 

93

%

 

(25

)%

Number of metered customers - end of period:

 

 

 

 

 

 

 

 

 

 

 

Residential

2,275,006

 

 

2,217,326

 

 

3

%

 

2,275,006

 

 

2,217,326

 

 

3

%

Total

2,567,699

 

 

2,506,124

 

 

2

%

 

2,567,699

 

 

2,506,124

 

 

2

%

Reference is made to the Combined Notes to Unaudited Condensed 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, Except Throughput and Customer Data)

(Unaudited)

 

Indiana Electric Integrated

 

Quarter Ended June 30,

 

% Diff

 

Six Months Ended June 30,

 

% Diff

 

2020

 

2019

 

Fav/Unfav

 

2020

 

2019 (1)

 

Fav/Unfav

Utility revenues

$

128

 

 

$

140

 

 

(9

)%

 

$

257

 

 

$

223

 

 

15

%

Utility natural gas, fuel and purchased power

32

 

 

40

 

 

20

%

 

67

 

 

66

 

 

(2

)%

Utility revenues less Utility natural gas, fuel and purchased power

96

 

 

100

 

 

(4

)%

 

190

 

 

157

 

 

21

%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Operation and maintenance

38

 

 

46

 

 

17

%

 

82

 

 

94

 

 

13

%

Depreciation and amortization

26

 

 

25

 

 

(4

)%

 

51

 

 

41

 

 

(24

)%

Taxes other than income taxes

4

 

 

4

 

 

—

 

 

8

 

 

6

 

 

(33

)%

Goodwill impairment

—

 

 

—

 

 

—

 

 

185

 

 

—

 

 

—

 

Total expenses

68

 

 

75

 

 

9

%

 

326

 

 

141

 

 

(131

)%

Operating Income (Loss)

28

 

 

25

 

 

12

%

 

(136

)

 

16

 

 

(950

)%

Other Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

Interest expense and other finance charges

(5

)

 

(7

)

 

29

%

 

(11

)

 

(10

)

 

(10

)%

Other income, net

1

 

 

1

 

 

—

 

 

3

 

 

2

 

 

50

%

Income (Loss) From Continuing Operations Before Income Taxes

24

 

 

19

 

 

26

%

 

(144

)

 

8

 

 

(1,900

)%

Income tax expense

5

 

 

3

 

 

(67

)%

 

8

 

 

1

 

 

(700

)%

Net Income (Loss)

$

19

 

 

$

16

 

 

19

%

 

$

(152

)

 

$

7

 

 

(2,271

)%

Actual GWH Delivered

 

 

 

 

 

 

 

 

 

 

 

Retail

1,010

 

 

1,157

 

 

(13

)%

 

2,088

 

 

1,861

 

 

12

%

Wholesale

58

 

 

94

 

 

(38

)%

 

121

 

 

152

 

 

(20

)%

Total

1,068

 

 

1,251

 

 

(15

)%

 

2,209

 

 

2,013

 

 

10

%

Number of metered customers - end of period:

 

 

 

 

 

 

 

 

 

 

 

Residential

129,761

 

 

128,167

 

 

1

%

 

129,761

 

 

128,167

 

 

1

%

Total

148,823

 

 

147,076

 

 

1

%

 

148,823

 

 

147,076

 

 

1

%

 

 

 

 

 

 

 

 

 

 

 

 

(1) Represents February 1, 2019 through June 30, 2019 results only due to the Merger.

Reference is made to the Combined Notes to Unaudited Condensed 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, Except Throughput and Customer Data)

(Unaudited)

 

Natural Gas Distribution

 

Three Months Ended June 30,

 

% Diff

 

Six Months Ended June 30,

 

% Diff

 

2020

 

2019

 

Fav/Unfav

 

2020

 

2019 (1)

 

Fav/Unfav

Utility revenues

$

628

 

 

$

660

 

 

(5

)%

 

$

1,934

 

 

$

2,059

 

 

(6

)%

Non-utility revenues

13

 

 

13

 

 

—

 

 

25

 

 

29

 

 

(14

)%

Total revenues

641

 

 

673

 

 

(5

)%

 

1,959

 

 

2,088

 

 

(6

)%

Utility natural gas, fuel and purchased power

170

 

 

220

 

 

23

%

 

744

 

 

991

 

 

25

%

Non-utility cost of revenues, including natural gas

7

 

 

8

 

 

13

%

 

13

 

 

18

 

 

28

%

Revenues less Utility natural gas, fuel and purchased power and Non-utility cost of revenue

464

 

 

445

 

 

4

%

 

1,202

 

 

1,079

 

 

11

%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Operation and maintenance

232

 

 

244

 

 

5

%

 

499

 

 

554

 

 

10

%

Depreciation and amortization

113

 

 

107

 

 

(6

)%

 

224

 

 

202

 

 

(11

)%

Taxes other than income taxes

56

 

 

46

 

 

(22

)%

 

123

 

 

106

 

 

(16

)%

Total expenses

401

 

 

397

 

 

(1

)%

 

846

 

 

862

 

 

2

%

Operating Income

63

 

 

48

 

 

31

%

 

356

 

 

217

 

 

64

%

Other Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

Interest expense and other finance charges

(29

)

 

(24

)

 

(21

)%

 

(61

)

 

(47

)

 

(30

)%

Interest income

2

 

 

—

 

 

—

 

 

3

 

 

1

 

 

200

%

Other expense, net

—

 

 

—

 

 

—

 

 

(2

)

 

(1

)

 

(100

)%

Income From Continuing Operations Before Income Taxes

36

 

 

24

 

 

50

%

 

296

 

 

170

 

 

74

%

Income tax expense

3

 

 

1

 

 

(200

)%

 

59

 

 

27

 

 

(119

)%

Net Income

$

33

 

 

$

23

 

 

43

%

 

$

237

 

 

$

143

 

 

66

%

Throughput data in BCF

 

 

 

 

 

 

 

 

 

 

 

Residential

32

 

 

30

 

 

7

%

 

139

 

 

144

 

 

(3

)%

Commercial and industrial

87

 

 

102

 

 

(15

)%

 

233

 

 

238

 

 

(2

)%

Total Throughput

119

 

 

132

 

 

(10

)%

 

372

 

 

382

 

 

(3

)%

Weather (average for service area)

 

 

 

 

 

 

 

 

 

 

 

Percentage of 10-year average:

 

 

 

 

 

 

 

 

 

 

 

Heating degree days

121

%

 

93

%

 

28

%

 

90

%

 

101

%

 

(11

)%

Number of customers - end of period:

 

 

 

 

 

 

 

 

 

 

 

Residential

4,282,921

 

 

4,195,222

 

 

2

%

 

4,282,921

 

 

4,195,222

 

 

2

%

Commercial and industrial

348,661

 

 

347,092

 

 

—

 

 

348,661

 

 

347,092

 

 

—

 

Total

4,631,582

 

 

4,542,314

 

 

2

%

 

4,631,582

 

 

4,542,314

 

 

2

%

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes acquired natural gas operations February 1, 2019 through June 30, 2019 results only due to the Merger.

Reference is made to the Combined Notes to Unaudited Condensed 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, Except Throughput and Customer Data)

(Unaudited)

 

Midstream Investments

 

Quarter Ended June 30,

 

% Diff

 

Six Months Ended June 30,

 

% Diff

 

2020

 

2019

 

Fav/Unfav

 

2020

 

2019

 

Fav/Unfav

Non-utility revenues

$

—

 

 

$

—

 

 

—

 

$

—

 

 

$

—

 

 

—

Taxes other than income taxes

—

 

 

—

 

 

—

 

(1

)

 

—

 

 

—

Total expenses

—

 

 

—

 

 

—

 

(1

)

 

—

 

 

—

Operating Income

—

 

 

—

 

 

—

 

1

 

 

—

 

 

—

Other Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

Interest expense and other finance charges

(13

)

 

(14

)

 

7

%

 

(27

)

 

(26

)

 

(4

)%

Equity in earnings (loss) from Enable, net

43

 

 

74

 

 

(42

)%

 

(1,432

)

 

136

 

 

(1,153

)%

Interest income

1

 

 

3

 

 

(67

)%

 

1

 

 

5

 

 

(80

)%

Income (Loss) From Continuing Operations Before Income Taxes

31

 

 

63

 

 

(51

)%

 

(1,457

)

 

115

 

 

(1,367

)%

Income tax expense (benefit)

7

 

 

13

 

 

46

%

 

(354

)

 

41

 

 

963

%

Net Income (Loss)

$

24

 

 

$

50

 

 

(52

)%

 

$

(1,103

)

 

$

74

 

 

(1,591

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Other

 

Three Months Ended June 30,

 

% Diff

 

Six Months Ended June 30,

 

% Diff

 

2020

 

2019

 

Fav/Unfav

 

2020

 

2019 (1)

 

Fav/Unfav

Non-utility revenues

$

86

 

 

$

80

 

 

8

%

 

$

168

 

 

$

122

 

 

38

%

Non-utility cost of revenues, including natural gas

62

 

 

53

 

 

(17

)%

 

120

 

 

90

 

 

(33

)%

Non-utility revenues less Non-utility cost of revenues, including natural gas

24

 

 

27

 

 

(11

)%

 

48

 

 

32

 

 

50

%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Operation and maintenance

8

 

 

22

 

 

64

%

 

13

 

 

46

 

 

72

%

Depreciation and amortization

18

 

 

14

 

 

(29

)%

 

35

 

 

28

 

 

(25

)%

Taxes other than income taxes

5

 

 

2

 

 

(150

)%

 

7

 

 

4

 

 

(75

)%

Total expenses

31

 

 

38

 

 

18

%

 

55

 

 

78

 

 

29

%

Operating Loss

(7

)

 

(11

)

 

36

%

 

(7

)

 

(46

)

 

85

%

Other Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on marketable securities

75

 

 

64

 

 

17

%

 

(69

)

 

147

 

 

(147

)%

Gain (loss) on indexed debt securities

(76

)

 

(68

)

 

(12

)%

 

59

 

 

(154

)

 

138

%

Interest expense and other finance charges

(67

)

 

(94

)

 

29

%

 

(163

)

 

(178

)

 

8

%

Interest income

27

 

 

39

 

 

(31

)%

 

75

 

 

85

 

 

(12

)%

Other income, net

18

 

 

7

 

 

157

%

 

29

 

 

17

 

 

71

%

Loss From Continuing Operations Before Income Taxes

(30

)

 

(63

)

 

52

%

 

(76

)

 

(129

)

 

41

%

Income tax benefit

(2

)

 

(25

)

 

(92

)%

 

(52

)

 

(69

)

 

(25

)%

Net Loss

$

(28

)

 

$

(38

)

 

26

%

 

$

(24

)

 

$

(60

)

 

60

%

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes acquired corporate and other operations February 1, 2019 through June 30, 2019 results only due to the Merger.

 

 

Reference is made to the Combined Notes to Unaudited Condensed 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, Except Throughput and Customer Data)

(Unaudited)

 

Capital Expenditures by Segment

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019 (1)

Houston Electric T&D

$

232

 

 

$

248

 

 

$

514

 

 

$

483

 

Indiana Electric Integrated

66

 

 

52

 

 

114

 

 

89

 

Natural Gas Distribution

312

 

 

283

 

 

550

 

 

449

 

Corporate and Other

22

 

 

26

 

 

48

 

 

94

 

Continuing Operations

$

632

 

 

$

609

 

 

1,226

 

 

1,115

 

Discontinued Operations

—

 

 

25

 

 

21

 

 

47

 

Total Capital Expenditures

$

632

 

 

$

634

 

 

$

1,247

 

 

$

1,162

 

 

 

 

 

 

 

 

 

(1) Includes capital expenditures of acquired businesses from February 1, 2019 through June 30, 2019 only due to the Merger.

 

 

 

 

 

 

 

 

 

Interest Expense Detail

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

Amortization of Deferred Financing Cost

$

8

 

 

$

7

 

 

$

15

 

 

$

14

 

Capitalization of Interest Cost

(7

)

 

(10

)

 

(13

)

 

(19

)

Securitization Bonds Interest Expense

7

 

 

10

 

 

15

 

 

22

 

Other Interest Expense

127

 

 

137

 

 

265

 

 

260

 

Total Interest Expense

$

135

 

 

$

144

 

 

$

282

 

 

$

277

 

Reference is made to the Combined Notes to Unaudited Condensed 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)

 

June 30,
2020

 

December 31,
2019

ASSETS

Current Assets:

 

 

 

Cash and cash equivalents

$

168

 

 

$

241

 

Current assets held for sale

—

 

 

1,002

 

Other current assets

2,333

 

 

2,694

 

Total current assets

2,501

 

 

3,937

 

 

 

 

 

Property, Plant and Equipment, net

21,348

 

 

20,624

 

 

 

 

 

Other Assets:

 

 

 

Goodwill

4,697

 

 

4,882

 

Regulatory assets

2,149

 

 

2,117

 

Investment in unconsolidated affiliates

855

 

 

2,408

 

Preferred units – unconsolidated affiliate

363

 

 

363

 

Non-current assets held for sale

—

 

 

962

 

Other non-current assets

235

 

 

236

 

Total other assets

8,299

 

 

10,968

 

Total Assets

$

32,148

 

 

$

35,529

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

 

 

 

Current portion of securitization bonds long-term debt

$

206

 

 

$

231

 

Indexed debt

17

 

 

19

 

Current portion of other long-term debt

1,707

 

 

618

 

Current liabilities held for sale

—

 

 

455

 

Other current liabilities

2,379

 

 

2,655

 

Total current liabilities

4,309

 

 

3,978

 

 

 

 

 

Other Liabilities:

 

 

 

Deferred income taxes, net

3,491

 

 

3,928

 

Regulatory liabilities

3,463

 

 

3,474

 

Non-current liabilities held for sale

—

 

 

43

 

Other non-current liabilities

1,556

 

 

1,503

 

Total other liabilities

8,510

 

 

8,948

 

 

 

 

 

Long-term Debt:

 

 

 

Securitization bonds

639

 

 

746

 

Other

10,298

 

 

13,498

 

Total long-term debt

10,937

 

 

14,244

 

 

 

 

 

Shareholders' Equity

8,392

 

 

8,359

 

Total Liabilities and Shareholders' Equity

$

32,148

 

 

$

35,529

 

Reference is made to the Combined Notes to Unaudited Condensed 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)

 

Six Months Ended June 30,

 

2020

 

2019

Net income (loss)

$

(1,094

)

 

$

364

 

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

 

 

 

Depreciation and amortization

595

 

 

679

 

Deferred income taxes

(477

)

 

(21

)

Goodwill impairment and loss from classification to held for sale

172

 

 

—

 

Goodwill impairment

185

 

 

—

 

Write-down of natural gas inventory

3

 

 

3

 

Equity in (earnings) losses of unconsolidated affiliates

1,432

 

 

(136

)

Distributions from unconsolidated affiliates

109

 

 

149

 

Changes in net regulatory assets and liabilities

(80

)

 

(77

)

Changes in other assets and liabilities

333

 

 

(395

)

Other, net

3

 

 

8

 

Net cash provided by operating activities

1,181

 

 

574

 

 

 

 

 

Net cash used in investing activities

(143

)

 

(7,149

)

 

 

 

 

Net cash provided by (used in) financing activities

(1,115

)

 

2,629

 

 

 

 

 

Net Decrease in Cash, Cash Equivalents and Restricted Cash

(77

)

 

(3,946

)

 

 

 

 

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

271

 

 

4,278

 

 

 

 

 

Cash, Cash Equivalents and Restricted Cash at End of Period

$

194

 

 

$

332

 

Reference is made to the Combined Notes to Unaudited Condensed Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

Media:
Alicia Dixon 
Phone: 713.825.9107

Investors:
David Mordy 
Phone: 713.207.6500

Source: CenterPoint Energy, Inc.