CenterPoint Energy Reports First Quarter 2012 Earnings

HOUSTON, May 3, 2012 /PRNewswire/ -- CenterPoint Energy, Inc. (NYSE: CNP) today reported net income of $147 million, or $0.34 per diluted share, for the first quarter of 2012 compared to $148 million, or $0.35 per diluted share, for the same period of 2011. Operating income for the first quarter of 2012 was $338 million compared to $364 million for the same period of 2011.

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"Despite extremely mild winter weather and low natural gas prices, the company reported solid earnings for the quarter," said David M. McClanahan, president and chief executive officer of CenterPoint Energy. "The benefits of our diversified portfolio of electric and natural gas businesses were evident this quarter and the fundamentals of our business units remain strong.  We continue to look for opportunities to invest in each of our businesses where we believe we can build value for our shareholders."

Electric Transmission & Distribution

The electric transmission & distribution segment reported operating income of $107 million for the first quarter of 2012, consisting of $70 million from the regulated electric transmission & distribution utility operations (TDU) and $37 million related to securitization bonds. Operating income for the first quarter of 2011 was $101 million, consisting of $68 million from the TDU and $33 million related to securitization bonds. Operating income for the TDU benefited from higher miscellaneous revenues, growth of more than 42,000 customers since March 2011, and higher returns associated primarily with the company's recovery of the true-up proceeds. These gains were partially offset by milder weather and impacts from new rates implemented in September 2011.

Natural Gas Distribution

The natural gas distribution segment reported operating income of $121 million for the first quarter of 2012 compared to $142 million for the same period of 2011. Operating income declined due to significantly warmer winter weather. 

Interstate Pipelines

The interstate pipelines segment reported operating income of $60 million for the first quarter of 2012 compared to $76 million for the same period of 2011. The decline was due to lower revenues primarily as a result of an expired backhaul contract and lower off-system sales due primarily to compressed basis differentials. These declines were partially offset by higher revenues from previously restructured contracts with the company's natural gas distribution affiliates and increased ancillary services. Operation and maintenance expenses were higher primarily due to a favorable insurance settlement recognized in the first quarter of 2011.

In addition to operating income, this segment recorded equity income of $6 million for the first quarter of 2012 from its 50 percent interest in the Southeast Supply Header (SESH) compared to $4 million for the same period of 2011.

Field Services

The field services segment reported operating income of $47 million for the first quarter of 2012 compared to $36 million for the same period of 2011. The first quarter of 2012 benefited from higher gathering volumes in the Haynesville and Fayetteville shales partially offset by lower prices received from sales of retained gas. 

In addition to operating income, this business had equity income of $3 million for the first quarter of 2012 from its 50 percent interest in a gathering and processing joint venture (Waskom) compared to $2 million for the same period of 2011.  

Competitive Natural Gas Sales and Services

The competitive natural gas sales and services segment reported operating income of $1 million for the first quarter of 2012 compared to $10 million for the same period of 2011. The first quarter of 2012 included a $4 million write-down of natural gas inventory to the lower of average cost or market. The first quarter of 2012 also included charges of $1 million resulting from mark-to-market accounting for derivatives associated with certain forward natural gas purchases and sales used to lock in economic margins compared to charges of $2 million for the same period of 2011. In addition to these items, operating income was impacted by milder winter weather, compressed margins and higher operation and maintenance expenses.  

Dividend Declaration

On April 26, 2012, CenterPoint Energy's board of directors declared a regular quarterly cash dividend of $0.2025 per share of common stock payable on June 8, 2012, to shareholders of record as of the close of business on May 16, 2012.

Outlook Reaffirmed for 2012

CenterPoint Energy reaffirmed its estimate for 2012 earnings on a guidance basis in the range of $1.08 to $1.20 per diluted share. Earnings guidance is being provided in the form of a range to reflect economic and operational variables associated with the company's various business segments and takes into consideration performance to date. Significant variables include the impact to earnings of commodity prices, volume throughput, weather, regulatory proceedings, effective tax rates and financing activities. In providing this guidance, the company does not include the impact of any changes in accounting standards, any impact from significant acquisitions or divestitures, any impact to earnings from the change in the value of Time Warner stocks and the related ZENS securities, or the timing effects of mark-to-market and inventory accounting in the company's competitive natural gas sales and services business.

Filing of Form 10-Q for CenterPoint Energy, Inc.

Today, CenterPoint Energy, Inc. filed with the Securities and Exchange Commission (SEC) its Quarterly Report on Form 10-Q for the period ended March 31, 2012. 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 other documents relating to its corporate governance can also be found on that site. 

Webcast of Earnings Conference Call

CenterPoint Energy's management will host an earnings conference call on Thursday, May 3, 2012, at 10:30 a.m. Central time or 11:30 a.m. Eastern time. Interested parties may listen to a live audio broadcast of the conference call on the company's website under the Investors section. A replay of the call can be accessed approximately two hours after the completion of the call and will be archived on the website for at least one year.

CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution, competitive natural gas sales and services, interstate pipelines, and field services operations. The company serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas. Assets total more than $22 billion. With over 8,800 employees, CenterPoint Energy and its predecessor companies have been in business for more than 135 years. For more information, visit the company's website at CenterPointEnergy.com.

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events and results may differ materially from those expressed or implied by these forward-looking statements.  The statements in this news release regarding the company's earnings outlook for 2012 and future financial performance and results of operations, 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, among others, energy deregulation or re-regulation, pipeline integrity and safety, health care reform, financial reform and tax legislation; (2) state and federal legislative and regulatory actions or developments relating to the environment, including those related to global climate change; (3) timely and appropriate rate actions and increases, allowing recovery of costs and a reasonable return on investment; (4) the timing and outcome of any audits, disputes or other proceedings related to taxes; (5) problems with construction, implementation of necessary technology or other issues with respect to major capital projects that result in delays or in cost overruns that cannot be recouped in rates; (6) industrial, commercial and residential growth in CenterPoint Energy's service territories and changes in market demand, including the effects of energy efficiency measures and demographic patterns; (7) the timing and extent of changes in commodity prices, particularly natural gas and natural gas liquids, and the effects of geographic and seasonal commodity price differentials, including the effects of these circumstances on re-contracting available capacity on CenterPoint Energy's interstate pipelines; (8) the timing and extent of changes in the supply of natural gas, particularly supplies available for gathering by CenterPoint Energy's field services business and transporting by its interstate pipelines, including the impact of natural gas prices on the level of drilling and production in the regions served by CenterPoint Energy; (9) competition in CenterPoint Energy's mid-continent region footprint for access to natural gas supplies and to markets; (10) weather variations and other natural phenomena; (11) 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; (12) the impact of unplanned facility outages; (13) timely and appropriate regulatory actions allowing securitization or other recovery of costs associated with any future hurricanes or natural disasters; (14) changes in interest rates or rates of inflation; (15) commercial bank and financial market conditions, CenterPoint Energy's access to capital, the cost of such capital, and the results of our financing and refinancing efforts, including availability of funds in the debt capital markets; (16) actions by credit rating agencies; (17) effectiveness of CenterPoint Energy's risk management activities; (18) inability of various counterparties to meet their obligations; (19) non-payment for services due to financial distress of CenterPoint Energy's customers; (20) the ability of GenOn Energy, Inc. (formerly known as RRI Energy, Inc.) and its subsidiaries to satisfy their obligations to CenterPoint Energy and its subsidiaries; (21) the ability of retail electric providers, and particularly the two largest customers of the TDU, to satisfy their obligations to CenterPoint Energy and its subsidiaries; (22) the outcome of litigation brought by or against CenterPoint Energy; (23) CenterPoint Energy's ability to control costs; (24) the investment performance of pension and postretirement benefit plans; (25) potential business strategies, including restructurings, acquisitions or dispositions of assets or businesses; (26) acquisition and merger activities involving CenterPoint Energy or its competitors; and (27) other factors discussed in CenterPoint Energy's Annual Report on Form 10-K for the fiscal year ended December 31, 2011, CenterPoint Energy's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, and other reports CenterPoint Energy or its subsidiaries may file from time to time with the Securities and Exchange Commission.

For more information contact
Media: 
Leticia Lowe

Phone 713.207.7702 
Investors: 
Marianne Paulsen
 
Phone 713.207.6500

CenterPoint Energy, Inc. and Subsidiaries


Reconciliation of reported Net Income and diluted EPS to the basis used in providing 2012 annual earnings guidance




Quarter Ended



March 31, 2012



Net Income


EPS



(in millions)



As reported

 

$           147


 

$        0.34

Timing effects impacting CES (1):





Mark-to-market (gains) losses - natural gas derivative contracts

1


0.00


Natural gas inventory write-downs

3


0.01

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





Marketable securities (2) 

(30)


(0.07)


Indexed debt securities

21


0.05

Per the basis used in providing 2012 annual earnings guidance

 

$           142


 

$        0.33







(1)  Competitive natural gas sales and services

(2)  Time Warner Inc., Time Warner Cable Inc. and AOL Inc.



CenterPoint Energy, Inc. and Subsidiaries

Statements of Consolidated Income

(Millions of Dollars)

(Unaudited)













Quarter Ended



March 31,



2011


2012











Revenues:





Electric Transmission & Distribution 


$   489


$   531

Natural Gas Distribution


1,212


854

Competitive Natural Gas Sales and Services


706


525

Interstate Pipelines 


147


127

Field Services


90


105

Other Operations


3


3

Eliminations


(60)


(61)

Total


2,587


2,084






Expenses:





Natural gas


1,476


969

Operation and maintenance


439


455

Depreciation and amortization


201


224

Taxes other than income taxes


107


98

Total


2,223


1,746

Operating Income


364


338






Other Income (Expense) :





Gain on marketable securities


32


46

Loss on indexed debt securities


(23)


(33)

Interest and other finance charges


(116)


(110)

Interest on transition and system restoration bonds


(33)


(37)

Equity in earnings of unconsolidated affiliates


6


9

Other - net


5


6

Total


(129)


(119)






Income Before Income Taxes 


235


219






Income Tax Expense


87


72






Net Income


$   148


$   147
































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

 

CenterPoint Energy, Inc. and Subsidiaries

Selected Data From Statements of Consolidated Income

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

(Unaudited)















Quarter Ended




March 31,




2011


2012














Basic Earnings Per Common Share


$      0.35


$      0.34








Diluted Earnings Per Common Share


$      0.35


$      0.34








Dividends Declared per Common Share


$  0.1975


$  0.2025








     Weighted Average Common Shares Outstanding (000):






- Basic


425,018


426,499


- Diluted


427,415


428,492














Operating Income (Loss) by Segment 












Electric Transmission & Distribution:






Electric Transmission and Distribution Operations


$         68


$         70


Transition and System Restoration Bond Companies


33


37


Total Electric Transmission & Distribution


101


107


Natural Gas Distribution


142


121


Competitive Natural Gas Sales and Services


10


1


Interstate Pipelines


76


60


Field Services


36


47


Other Operations


(1)


2








Total


$       364


$       338

























































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







 

CenterPoint Energy, Inc. and Subsidiaries

Results of Operations by Segment

(Millions of Dollars)

(Unaudited)



















Electric Transmission & Distribution



Quarter Ended 






March 31,


% Diff




2011


2012


Fav/(Unfav)


Results of Operations:








Revenues:








Electric transmission and distribution utility


$            400


$            415


4%


Transition and system restoration bond companies


89


116


30%


Total


489


531


9%










Expenses:








Operation and maintenance


208


220


(6%)


Depreciation and amortization


71


73


(3%)


Taxes other than income taxes


53


52


2%


Transition and system restoration bond companies


56


79


(41%)


Total


388


424


(9%)


Operating Income


$            101


$            107


6%










Operating Income:








Electric transmission and distribution operations


$              68


$              70


3%


Transition and system restoration bond companies


33


37


12%


Total Segment Operating Income


$            101


$            107


6%


















Electric Transmission & Distribution






Operating Data:






Actual MWH Delivered








Residential


4,871,253


4,525,294


(7%)


Total


16,767,968


16,544,009


(1%)










Weather (average for service area):








Percentage of 10-year average:








Cooling degree days


151%


237%


86%


Heating degree days


109%


56%


(53%)


















Number of metered customers - end of period:








Residential


1,879,796


1,914,906


2%


Total


2,124,809


2,167,052


2%




























Natural Gas Distribution



Quarter Ended 






March 31,


% Diff




2011


2012


Fav/(Unfav)


Results of Operations:








Revenues


$         1,212


$            854


(30%)


Expenses:








Natural gas


818


493


40%


Operation and maintenance


168


163


3%


Depreciation and amortization


42


43


(2%)


Taxes other than income taxes


42


34


19%


Total


1,070


733


31%


Operating Income 


$            142


$            121


(15%)










Natural Gas Distribution Operating Data:








Throughput data in BCF








Residential


90


62


(31%)


Commercial and Industrial


88


74


(16%)


Total Throughput


178


136


(24%)


















Weather (average for service area)








Percentage of 10-year average:








Heating degree days


108%


69%


(39%)


















Number of customers - end of period:








Residential


3,029,079


3,042,617


-


Commercial and Industrial


246,987


246,852


-


Total


3,276,066


3,289,469


-



























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

 

CenterPoint Energy, Inc. and Subsidiaries

Results of Operations by Segment

(Millions of Dollars)

(Unaudited)

















Competitive Natural Gas Sales and Services



Quarter Ended 





March 31,


% Diff



2011


2012


Fav/(Unfav)

Results of Operations:







Revenues


$     706


$     525


(26%)

Expenses:







Natural gas


685


511


25%

Operation and maintenance


10


12


(20%)

Depreciation and amortization


1


1


-

Taxes other than income taxes


-


-


-

Total


696


524


25%

Operating Income


$       10


$         1


(90%)








Competitive Natural Gas Sales and Services Operating Data:







Throughput data in BCF


155


161


4%








Number of customers - end of period


11,942


14,495


21%
























Interstate Pipelines



Quarter Ended 





March 31,


% Diff



2011


2012


Fav/(Unfav)

Results of Operations:







Revenues


$     147


$     127


(14%)

Expenses:







Natural gas


18


7


61%

Operation and maintenance


31


38


(23%)

Depreciation and amortization


13


14


(8%)

Taxes other than income taxes


9


8


11%

Total


71


67


6%

Operating Income


$       76


$       60


(21%)








Equity in Earnings of Unconsolidated Affiliates


$         4


$         6


50%















Pipelines Operating Data:







Throughput data in BCF







Transportation


455


378


(17%)















































































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








 

CenterPoint Energy, Inc. and Subsidiaries

Results of Operations by Segment

(Millions of Dollars)

(Unaudited)

















Field Services



Quarter Ended 





March 31,


% Diff



2011


2012


Fav/(Unfav)

Results of Operations:







Revenues


$    90


$  105


17%

Expenses:







Natural gas


15


18


(20%)

Operation and maintenance


29


27


7%

Depreciation and amortization


9


11


(22%)

Taxes other than income taxes


1


2


(100%)

Total


54


58


(7%)

Operating Income


$    36


$    47


31%








Equity in Earnings of Unconsolidated Affiliates


$      2


$      3


50%








Field Services Operating Data:







Throughput data in BCF







Gathering


183


237


30%

















Other Operations



Quarter Ended 





March 31,


% Diff



2011


2012


Fav/(Unfav)

Results of Operations:







Revenues


$      3


$      3


-

Expenses


4


1


75%

Operating Income (Loss)


$    (1)


$      2


300%




































 Capital Expenditures by Segment 



(Millions of Dollars)



(Unaudited)












Quarter Ended 





March 31,





2011


2012



Capital Expenditures by Segment







Electric Transmission & Distribution


$  106


$  136



Natural Gas Distribution


51


66



Competitive Natural Gas Sales and Services


-


1



Interstate Pipelines


18


20



Field Services


69


13



Other Operations


9


6



Total


$  253


$  242
























Interest Expense Detail



(Millions of Dollars)



(Unaudited)












Quarter Ended 





March 31,





2011


2012



Interest Expense Detail







Amortization of Deferred Financing Cost


$      7


$      7



Capitalization of Interest Cost


(2)


(1)



Transition and System Restoration Bond Interest Expense


33


37



Other Interest Expense


111


104



Total Interest Expense


$  149


$  147














































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

 

CenterPoint Energy, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Millions of Dollars)

(Unaudited)















December 31,


March 31,




2011


2012














                                        ASSETS






Current Assets:






  Cash and cash equivalents


$           220


$   1,096


  Other current assets


2,117


1,872


      Total current assets


2,337


2,968








Property, Plant and Equipment, net


12,402


12,512








Other Assets:






  Goodwill


1,696


1,696


  Regulatory assets


4,619


4,524


  Other non-current assets


649


651


      Total other assets


6,964


6,871


        Total Assets


$       21,703


$ 22,351








                         LIABILITIES AND SHAREHOLDERS' EQUITY












Current Liabilities:






  Short-term borrowings


$             62


$         9


  Current portion of transition and system restoration bonds long-term debt


307


380


  Current portion of indexed debt


131


133


  Current portion of other long-term debt


46


496


  Other current liabilities


2,047


1,717


      Total current liabilities


2,593


2,735








Other Liabilities:






  Accumulated deferred income taxes, net 


3,832


3,944


  Regulatory liabilities


1,039


1,071


  Other non-current liabilities


1,376


1,310


      Total other liabilities


6,247


6,325








Long-term Debt:






  Transition and system restoration bonds


2,215


3,686


  Other


6,426


5,319


      Total long-term debt


8,641


9,005








Shareholders' Equity


4,222


4,286


      Total Liabilities and Shareholders' Equity


$       21,703


$ 22,351





























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


 

CenterPoint Energy, Inc. and Subsidiaries

Condensed Statements of Consolidated Cash Flows

(Millions of Dollars)

(Unaudited)














Three Months Ended March 31,


2011


2012





Cash Flows from Operating Activities:




  Net income

$148


$   147

  Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation and amortization

208


232

Deferred income taxes

80


64

Changes in net regulatory assets

17


42

Changes in other assets and liabilities

173


(65)

Other, net

1


4

Net Cash Provided by Operating Activities

627


424





Net Cash Used in Investing Activities

(308)


(292)





Net Cash Provided by (Used in) Financing Activities

(423)


744





Net Increase (Decrease) in Cash and Cash Equivalents

(104)


876





Cash and Cash Equivalents at Beginning of Period

199


220





Cash and Cash Equivalents at End of Period

$  95


$1,096














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





 

SOURCE CenterPoint Energy, Inc.



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