Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Debt Investor Presentation (March 2017)
27 slides from Centerpoint Energy, Inc (holding Co)'s debt investor presentation, Mar 27, 2017
Slide 1: Introduction to CenterPoint Energy Fixed Income Investors
Focused on Energy Delivery, Positioned to Execute Introduction to CenterPoint Energy Fixed Income Investors March 2017 A Fortune 500 company Exhibit 99.1
Slide 2: Cautionary Statement
Cautionary Statement This presentation and the oral statements made in connection herewith contain statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future operations, events, financial position, earnings, growth, costs, prospects, capital investments or performa
Slide 3: Agenda
Agenda Overview CNP Credit Thesis Review of Operating Companies Houston Electric CERC Corp. Liquidity and Capital Resources Additional Resources Capital Expenditure Plans Reference Materials
Slide 4: CenterPoint Energy, Inc. Regulated Electric and Natural Gas Utility
CenterPoint Energy, Inc. (NYSE: CNP) Regulated Electric and Natural Gas Utility Serving more than 5.8 Million Customers Electric Transmission & Distribution: Electric utility operations with ~2.4 million metered customers across ~5,000 square miles in and around Houston, Texas 19th largest U.S. inve
Slide 5: CenterPoint Energy's Value Proposition
CenterPoint Energy’s Value Proposition Expect to continue delivering long-term value… Targeting upper end of 4-6% year-over-year earnings growth range for 2018 Strong credit metrics for current ratings As a result of strong fundamentals… Strong operating cash flow and balance sheet Capital investmen
Slide 6: Vision and Strategy: Operate, Serve, Grow
Operating Energy Delivery Businesses that Provide Superior Performance for our Key Stakeholders Our Vision: Lead the nation in delivering energy, service and value We are a premier U.S. energy delivery company Delivering energy is CenterPoint Energy’s core business Delivering service and value appli
Slide 7: Midstream Investment Ownership Review Update
Midstream Investment Ownership Review Update Criteria for Consideration of a Sale or Spin – sustainable value for our long-term shareholders Comparable earnings per share and dividends Improve visibility of future earnings Seek to maintain current credit ratings Ongoing Activities Evaluating OGE’s R
Slide 8: CenterPoint Energy Credit Thesis
CenterPoint Energy Credit Thesis Strong Credit Metrics and Balance Sheet Commitment to strong credit metrics Target 18-20% Adjusted FFO/Total Debt Metrics strong for current credit ratings Target Baa1 (Moody’s)/A- (S&P) for CNP and CERC, A3/A- for CEHE Commitment to maintaining a strong balance shee
Slide 9: CenterPoint Energy Credit Metrics/Ratings
CenterPoint Energy Credit Metrics/Ratings (1) Total debt excludes transition and system restoration bonds (2) Credit facility covenant calculation, excludes transition and system restoration bonds and adjusts ZENS and non-cash impairments (3) CNP and CERC senior unsecured; CEHE senior secured genera
Slide 10: Houston Electric Electric Transmission and Distribution - Overview
Houston Electric Electric Transmission and Distribution - Overview ~2.4 million metered customers; ~5,000 square miles in and around Houston, Texas Consistent residential customer growth of ~2% Nov. 2016 average residential electric price in TX: $0.111/kwh (1) Has consistently earned at or near its
Slide 11: Houston Electric Growth and Risk Profile
Houston Electric Growth and Risk Profile Houston Electric produces growing, predictable and stable earnings and cash flows Robust utility service territory Consistent residential customer growth of ~2% 100% of earnings from regulated operations, excluding equity return primarily related to true-up p
Slide 12: CERC Corp. – Overview Natural Gas Distribution
CERC Corp. – Overview Natural Gas Distribution Six state footprint with vibrant metropolitan areas of Houston and Minneapolis ~3.4 million customers ~1% annual customer growth since 2010 Earning near allowed returns; aggregate allowed ROE: 9.81% Capital recovery mechanisms that reduce regulatory lag
Slide 13: CERC Corp. – Overview Energy Services Outlook
CERC Corp. – Overview Energy Services Outlook Competitive natural gas supply and related energy services Non-regulated operations complementary to natural gas utilities ~33,000 commercial and industrial customers across 33 states 2017 Outlook Energy Services projected to contribute $45 – $55 million
Slide 14: CERC Corp. Credit Metrics and Ratings
CERC Corp. Credit Metrics and Ratings CERC produces growing and stable earnings and cash flows Robust utility service territory Consistent utility customer growth of ~1% ~60% of CERC Adjusted FFO from utility operations(1) Enable Midstream’s financial performance and balance sheet expected to transl
Slide 15: Liquidity and Capital Resources
2016 Adjusted FFO / Total Debt – 24% (1) Equity / Total Capital – 36% (1) Interest expense savings of $14 million with over $600 million of 6% plus debt retired in 2016 (1) 2017 Planned capital investment of approximately $1.5 billion Net incremental borrowings anticipated of $200 - $500 million; de
Slide 16: CenterPoint Energy Financing Entities and Liquidity
CenterPoint Energy Financing Entities and Liquidity CenterPoint Energy, Inc. $1.6 Billion CenterPoint Energy Houston Electric, LLC $300 Million CenterPoint Energy Resources Corp. $600 Million 64% of total capacity 12% of total capacity 24% of total capacity Money Pool Money Pool Total contracted liq
Slide 17: CenterPoint Energy Summary
CenterPoint Energy Summary Growing Utilities with Favorable Rate Environment Limit Business Risk Strong utility service territories 2% customer growth at CEHE and 1% customer growth at CERC over last several years Geographic, economic and seasonal diversity Constructive regulatory environment Favora
Slide 18: Additional Resources
Additional Resources
Slide 19: Electric Transmission and Distribution Capital Investment Outlook
2016A 2017E 2018E 2019E 2020E 2021E Transmission 48% 50% 45% 47% 40% 31% Distribution 49% 46% 50% 49% 56% 64% Electric Transmission and Distribution Capital Investment Outlook $4.1 Billion 2017 – 2021 Capital Plan (1) Includes AFUDC (2) Capital expenditures related to the Brazos Valley Connection in
Slide 20: Natural Gas Distribution Capital Investment Outlook
Capital Recovery Method 2016A 2017E 2018E 2019E 2020E 2021E Annual Mechanisms 27% 57% 63% 57% 63% 63% Rate Cases 73% 43% 37% 43% 37% 37% Natural Gas Distribution Capital Investment Outlook $2.7 Billion 2017 – 2021 Capital Plan (1) Includes AFUDC (1)
Slide 21: Additional Reference Materials
Additional Reference Materials Investor Relations Contact Information – 713-207-6500 Carla Kneipp – Treasurer and VP, carla.kneipp@centerpointenergy.com Dave Mordy – IR Director; david.mordy@centerpointenergy.com Olivia Webb – IR Manager; olivia.webb@centerpointenergy.com Brandi Summersill – IR Coor
Slide 22: CenterPoint Energy Consolidated Adjusted Funds From Operations (FFO)
CenterPoint Energy Consolidated Adjusted Funds From Operations (FFO) ($ in millions) Year Ended December 31, 2016 Year Ended December 31, 2015 Year Ended December 31, 2014 Amounts included in Cash Flows from Operating Activities: Net income (loss) $ 432 $ (692) $ 611 Depreciation and amortization 1,
Slide 23: CenterPoint Energy Consolidated Ratio of Adjusted FFO/Total Debt
CenterPoint Energy Consolidated Ratio of Adjusted FFO/Total Debt Excluding Transition and System Restoration Bonds ($ in millions) December 31, 2016 December 31, 2015 December 31, 2014 Short-term Debt: Short-term borrowings $ 35 $ 40 $ 53 Current portion of transition and system restoration bonds* 4
Slide 24: Houston Electric Adjusted Funds From Operations (FFO)
Houston Electric Adjusted Funds From Operations (FFO) ($ in millions) Year Ended December 31, 2016 Year Ended December 31, 2015 Year Ended December 31, 2014 Amounts included in Cash Flows from Operating Activities: Net income $ 276 $ 261 $ 252 Depreciation and amortization 838 705 768 Amortization o
Slide 25: Houston Electric Ratio of Adjusted FFO/Total Debt
Houston Electric Ratio of Adjusted FFO/Total Debt Excluding Transition and System Restoration Bonds ($ in millions) December 31, 2016 December 31, 2015 December 31, 2014 Short-term Debt: Current portion of transition and system restoration bonds* $ 411 $ 391 $ 372 Notes payable – affiliated companie
Slide 26: CERC Corp. Adjusted Funds From Operations (FFO)
CERC Corp. Adjusted Funds From Operations (FFO) ($ in millions) Year Ended December 31, 2016 Year Ended December 31, 2015 Year Ended December 31, 2014 Amounts included in Cash Flows from Operating Activities: Net income (loss) $ 245 $ (912) $ 323 Depreciation and amortization 249 227 206 Amortizatio
Slide 27: CERC Corp. Ratio of Adjusted FFO/Total Debt
CERC Corp. Ratio of Adjusted FFO/Total Debt ($ in millions) December 31, 2016 December 31, 2015 December 31, 2014 Short-term Debt: Short-term borrowings $ 35 $ 40 $ 53 Current portion of other long-term debt 250 325 0 Notes payable – affiliated companies 0 0 188 Long-term Debt: Long-Term Debt, net 2
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