Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Debt Investor Presentation (March 2018)
27 slides from Centerpoint Energy, Inc (holding Co)'s debt investor presentation, Mar 12, 2018
Slide 1: Introduction to CenterPoint Energy Fixed Income Investors
Introduction to CenterPoint Energy Fixed Income Investors March 2018 Exhibit 99.1
Slide 2: Cautionary Statement
Cautionary Statement This presentation and the oral statements made in connection herewith contain statements concerning CenterPoint Energy, Inc.’s (“our,” “CenterPoint Energy” or the “Company”) expectations, beliefs, plans, objectives, goals, strategies, future operations, events, financial positio
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 5.9 Million Customers Electric Transmission & Distribution: Electric utility operations with ~2.4 million metered customers across ~5,000 square miles in and around Houston, Texas in 2017 18th largest U
Slide 5: CenterPoint Energy's Value Proposition
CenterPoint Energy’s Value Proposition Expect to continue delivering long-term value… Targeting 5-7% year-over-year earnings growth range for 2019 and 2020 Strong credit metrics for current ratings As a result of strong fundamentals… Strong operating cash flow and balance sheet Capital investment in
Slide 6: Operating Energy Delivery Businesses that Provide Superior Performance
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: 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 8: 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) A Moody’s rating outlook is an opinion regarding the like
Slide 9: Houston Electric Electric Transmission and Distribution Overview
Houston Electric Electric Transmission and Distribution – 2017 Overview ~2.4 million metered customers; ~5,000 square miles in and around Houston, Texas Residential customer growth of ~1.6% Earned near its 10% authorized ROE Transmission and distribution capital recovery mechanisms that reduce regul
Slide 10: Houston Electric Growth and Risk Profile
Houston Electric Growth and Risk Profile Houston Electric has produced growing, predictable and stable earnings and cash flows Robust utility service territory Residential customer growth of ~1.6% in 2017 100% of earnings from regulated operations, excluding equity return primarily related to true-u
Slide 11: CERC Corp. – 2017 Overview Natural Gas Distribution
CERC Corp. – 2017 Overview Natural Gas Distribution Six state footprint with vibrant metropolitan areas of Houston and Minneapolis ~3.5 million customers ~1% annual customer growth since 2010 Earning near allowed returns; aggregate allowed ROE: 9.6% Capital recovery mechanisms that reduce regulatory
Slide 12: CERC Corp. – 2017 Overview Energy Services Outlook
CERC Corp. – 2017 Overview Energy Services Outlook Competitive natural gas supply and related energy services Non-regulated operations complementary to natural gas utilities ~31,000 commercial and industrial customers across 33 states ~72,000 natural gas customers served under residential and small
Slide 13: CERC Corp. Credit Metrics and Ratings
CERC Corp. Credit Metrics and Ratings CERC has produced growing and stable earnings and cash flows Robust utility service territory Consistent utility customer growth of ~1% since 2010 60%+ of CERC Adjusted FFO from utility operations in 2017(1) Enable Midstream’s financial performance and balance s
Slide 14: Liquidity and Capital Resources
2017 Adjusted FFO / Total Debt – 24% (1) Debt to Total Capitalization – 53% (2) Net interest expense savings of $25 million with $800 million of 5.95% to 6.125% debt retired or redeemed in 2017 (1) 2018 Planned capital investment of approximately $1.7 billion Equity issuance not anticipated Adjusted
Slide 15: CenterPoint Energy Financing Entities and Liquidity
CenterPoint Energy Financing Entities and Liquidity CenterPoint Energy, Inc. $1.7 Billion CenterPoint Energy Houston Electric, LLC $300 Million CenterPoint Energy Resources Corp. $900 Million 59% of total capacity 10% of total capacity 31% of total capacity Money Pool Money Pool Total contracted liq
Slide 16: CenterPoint Energy Summary
CenterPoint Energy Summary Growing Utilities with Favorable Rate Environment Limit Business Risk Strong utility service territories ~1.6% residential customer growth at CEHE in 2017 and ~1% customer growth at CERC over last several years Geographic, economic and seasonal diversity Constructive regul
Slide 17: Additional Resources
e€ CenterPoint. Energy Additional Resources
Slide 18: 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 Bo Murphy – IR Manager; john.murphy@centerpointenergy.com Brandi Summersill – IR Coordi
Slide 19: Electric Transmission and Distribution Capital Investment Outlook
Electric Transmission and Distribution Capital Investment Outlook 2017A 2018E 2019E 2020E 2021E 2022E Transmission 49% 43% 44% 49% 43% 36% Distribution 46% 49% 52% 48% 52% 57% (1) (1) Includes AFUDC $4.8 Billion 2018 – 2022 Capital Plan $924 $949 $958 $1,004 $959 $900
Slide 20: Natural Gas Distribution Capital Investment Outlook
Capital Recovery Method 2017A 2018E 2019E 2020E 2021E 2022E Annual Mechanisms 58% 65% 58% 66% 67% 67% Rate Cases 42% 35% 42% 34% 33% 33% (1) Includes AFUDC $3.2 Billion 2018 – 2022 Capital Plan $523 $635 $612 $637 $664 $687 Natural Gas Distribution Capital Investment Outlook (1)
Slide 21: Rate Base Growth
Capital rate base projected to grow primarily as a result of capital investment outlook (1) The average annual rate base is subject to change due to actual capital investment and deferred taxes, the time frame over which excess deferred taxes are returned to customers, and the actual rate base autho
Slide 22: CenterPoint Energy Consolidated Adjusted Funds From Operations (FFO)
CenterPoint Energy Consolidated Adjusted Funds From Operations (FFO) This slide includes adjusted funds from operations (“FFO”) which is net cash provided by operating activities: Excluding (i) changes in other assets and liabilities, (ii) other, net and (iii) amounts related to transition and syste
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 * The transition and system restoration bonds are serviced with dedicated revenue streams, and the bonds are non-recourse to CenterPoint Energy and CenterPoint Energy Houston Electric.
Slide 24: Houston Electric Adjusted Funds From Operations (FFO)
Houston Electric Adjusted Funds From Operations (FFO) This slide includes adjusted funds from operations (“FFO”) which is net cash provided by operating activities excluding (i) changes in other assets and liabilities, (ii) other, net and (iii) amounts related to transition and system restoration bo
Slide 25: Houston Electric Ratio of Adjusted FFO/Total Debt
Houston Electric Ratio of Adjusted FFO/Total Debt Excluding Transition and System Restoration Bonds * The transition and system restoration bonds are serviced with dedicated revenue streams, and the bonds are non-recourse to CenterPoint Energy and CenterPoint Energy Houston Electric. This slide incl
Slide 26: CERC Corp. Adjusted Funds From Operations (FFO)
CERC Corp. Adjusted Funds From Operations (FFO) This slide includes adjusted funds from operations (“FFO”) which is net cash provided by operating activities excluding (i) changes in other assets and liabilities, and (ii) other, net, and including distributions from unconsolidated affiliates in exce
Slide 27: CERC Corp. Ratio of Adjusted FFO/Total Debt
CERC Corp. Ratio of Adjusted FFO/Total Debt This slide includes adjusted funds from operations (“FFO”) which is net cash provided by operating activities excluding (i) changes in other assets and liabilities, and (ii) other, net, and including distributions from unconsolidated affiliates in excess o
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