Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Q1 2019 Earnings Presentation
23 slides from Centerpoint Energy, Inc (holding Co)'s earnings presentation, May 9, 2019
Slide 1: 1st Quarter 2019 Earnings Call
1ST QUARTER 2019 EARNINGS CALL MAY 9, 2019
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This presentation and the oral statements made in connection herewith contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical f
Slide 3: Additional Information
ADDITIONAL INFORMATION Use of Non-GAAP Financial Measures In addition to presenting its financial results in accordance with generally accepted accounting principles (“GAAP”), including presentation of income available to common shareholders and diluted earnings per share, the Company also provides
Slide 4: Agenda
AGENDA • First Quarter Results • Business Segment Highlights President and CEO Scott Prochazka - Houston Electric – T&D - Indiana Electric – Integrated - Natural Gas Distribution - Energy Services - Infrastructure Services - Midstream Investments • Guidance Basis EPS Outlook Chief Financial Officer
Slide 5: First Quarter 2019 Performance
FIRST QUARTER 2019 PERFORMANCE Q1 GAAP Diluted EPS Q1 2018 vs. Q1 2019 Drivers(2) $0.38 h Rate Relief i Weather Driven h Customer Growth Opportunities: Energy $0.28 Services h Reduced Income Tax Expense i Higher O&M h Businesses Acquired in i Higher Depreciation and 2018 2019 Merger(4) Amortization
Slide 6: Houston Electric – T&D Highlights
HOUSTON ELECTRIC – T&D HIGHLIGHTS • Houston Electric – T&D core operating income, excluding merger-related expenses, was $84 million(1) in Q1 2019 compared with core operating income of $99 million(2) in Q1 2018, in line with expectations • Nearly 41,000 Houston Electric customers added year-over-ye
Slide 7: Indiana Electric – Integrated Highlights and Generation Transition Plan
INDIANA ELECTRIC – INTEGRATED HIGHLIGHTS AND GENERATION TRANSITION PLAN • Operating income of $11 million(1) for Q1 2019, excluding $20 million of merger-related expenses, in line with expectations • Recently, the Indiana Utility Regulatory Commission (IURC) approved portions of the 2016 generation
Slide 8: Natural Gas Distribution Highlights
NATURAL GAS DISTRIBUTION HIGHLIGHTS • Operating income of $220 million(1) in Q1 2019, including $46 million(2) from the addition of new jurisdictions and excluding $53 million(3) of merger- related expenses, was in line with expectations. Q1 2018 operating income was $156 million • Added more than 4
Slide 9: Energy Services and Infrastructure Services Highlights
ENERGY SERVICES AND INFRASTRUCTURE SERVICES HIGHLIGHTS Energy Services • Operating income was $14 million in Q1 2019 compared to $54 million in Q1 2018, excluding a mark-to-market gain of $19 million and loss of $80 million, respectively(1) • Anticipate performance for remainder of 2019 will provide
Slide 10: Midstream Investments Highlights
MIDSTREAM INVESTMENTS HIGHLIGHTS • Higher natural gas gathered, natural gas processed, crude oil and condensate gathered and natural gas transported volumes compared to the first quarter of 2018 • Rig activity remains strong around Enable’s gathering footprint with 52 rigs currently drilling wells e
Slide 11: Guidance Basis EPS Outlook
GUIDANCE BASIS EPS OUTLOOK(1) Reiterate 2019 and 2020 Guidance EPS EPS on a Guidance (Non-GAAP) Basis $2.00 $1.90 $1.80 $1.75 – $1.90(3) Target 5-7% CAGR growth $1.70 $1.60 – $1.70(2) rate through 2023 $1.60 $1.50 Based off 2018 guidance basis EPS, excluding impacts $1.40 associated with the merger,
Slide 12: Agenda
AGENDA • First Quarter Results • Business Segment Highlights President and CEO Scott Prochazka - Houston Electric – T&D - Indiana Electric – Integrated - Natural Gas Distribution - Energy Services - Infrastructure Services - Midstream Investments • Guidance Basis EPS Outlook Chief Financial Officer
Slide 13: Houston Electric – T&D: Core Operating Income Drivers Q1 2018 v. Q1 2019
HOUSTON ELECTRIC – T&D: CORE OPERATING INCOME DRIVERS Q1 2018 V. Q1 2019 $120 $6 $11 $99 $100 $21 $6 $19 $80 $7 $74(4) Federal income tax $10 $11 $ Millions expense is also decreased $60 $40 $78 $74 $63 $20 $0 (2) Q1 2018 Houston TCJA revenue Rate relief Customer growth Other (3) Depreciation and Me
Slide 14: Natural Gas Distribution: Operating Income Drivers Q1 2018 v. Q1 2019
NATURAL GAS DISTRIBUTION: OPERATING INCOME DRIVERS Q1 2018 V. Q1 2019 $240 $46 $200 $7 $21 $5 $3 $160 $53 $ Millions $12 $120 Federal income tax expense is also decreased $164 $167 $80 $156 $40 $0 (1) Q1 2018 TCJA revenue Rate relief Customer Other (2) Depreciation Jurisdictions Merger related Q1 20
Slide 15: Consolidated Adjusted Diluted EPS Drivers Q1 2018 v. Q1 2019
CONSOLIDATED ADJUSTED DILUTED EPS DRIVERS Q1 2018 V. Q1 2019 (GUIDANCE BASIS)(1) $0.70 $0.14 $0.60 $0.07 $0.01 $0.50 $0.15 $0.40 $0.55 $0.46 $0.30 $0.20 (4) Q1 2018 Guidance Basis Utility Operations Energy Services and Midstream Investments Other (5) Q1 2019 Guidance Basis EPS (1) Operating Income (
Slide 16: Agenda
AGENDA • First Quarter Results • Business Segment Highlights President and CEO Scott Prochazka - Houston Electric – T&D - Indiana Electric – Integrated - Natural Gas Distribution - Energy Services - Infrastructure Services - Midstream Investments • Guidance Basis EPS Outlook Chief Financial Officer
Slide 17: Houston Electric – T&D: Residential Customers and Weather Normalized Load
HOUSTON ELECTRIC – T&D : RESIDENTIAL CUSTOMERS AND WEATHER NORMALIZED RESIDENTIAL LOAD 3,500,000 35,000 Residential Customers / Houston Employment Weather Normalized Residential GWH Usage 3,000,000 30,000 2,500,000 25,000 2,000,000 20,000 1,500,000 15,000 1,000,000 10,000 500,000 5,000 1994 2003 201
Slide 18: Electric Operations Q1 2019 Regulatory Update
ELECTRIC OPERATIONS Q1 2019 REGULATORY UPDATE Annual Increase Filing Effective Approval Mechanism Additional Information (Decrease) (1) Date Date Date (in millions) CenterPoint Energy - Houston Electric (PUCT) On April 5, 2019, Houston Electric filed its base rate application with the PUCT and the c
Slide 19: Natural Gas Distribution Q1 2019 Regulatory Update
NATURAL GAS DISTRIBUTION Q1 2019 REGULATORY UPDATE Annual Increase Filing Effective Approval Mechanism (Decrease) (1) Additional Information Date Date Date (in millions) CenterPoint Energy and CERC - Beaumont/East Texas, South Texas, Houston and Texas Coast (Railroad Commission) GRIP (1) 20.2 Mar-19
Slide 20: Natural Gas Distribution Q1 2019 Regulatory Update
NATURAL GAS DISTRIBUTION Q1 2019 REGULATORY UPDATE Annual Increase Filing Effective Approval Mechanism Additional Information (Decrease) (1) Date Date Date (in millions) CenterPoint Energy - Indiana North - Gas (IURC) Requested an increase of $54.3 million to rate base, which reflects a $2.8 million
Slide 21: Reconciliation: Income and Diluted EPS to Adjusted Income (Quarterly Guidance)
RECONCILIATION: INCOME AND DILUTED EPS TO ADJUSTED INCOME AND ADJUSTED DILUTED EPS USED IN PROVIDING QUARTERLY EARNINGS GUIDANCE Quarter Ended March 31, 2019 March 31, 2018 Dollars Dollars in millions Diluted EPS in millions Diluted EPS Consolidated income available to common shareholders and dilute
Slide 22: Reconciliation: Income and Diluted EPS to Adjusted Income (Annual Guidance)
RECONCILIATION: INCOME AND DILUTED EPS TO ADJUSTED INCOME AND ADJUSTED DILUTED EPS USED IN PROVIDING ANNUAL EARNINGS GUIDANCE Twelve Months Ended December 31, 2018 Dollars in millions Diluted EPS Consolidated income available to common shareholders and diluted EPS $ 333 $ 0.74 Midstream Investments
Slide 23: Summary of Merger-Related Expenses First Quarter 2019
SUMMARY OF MERGER-RELATED EXPENSES(1) FIRST QUARTER 2019 O&M Amortization of Total ($ in millions) Expense(2) Intangibles (3) Impact Houston Electric - T&D $ 10 $ - $ 10 Indiana Electric - Integrated 20 - 20 Natural Gas Distribution(4) 53 - 53 Infrastructure Services 13 2 15 Corporate and Other(5) 1