Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Q2 2018 Earnings Presentation
31 slides from Centerpoint Energy, Inc (holding Co)'s earnings presentation, Aug 3, 2018
Slide 1: 2nd Quarter 2018 Investor Call
2nd QUARTER 2018 INVESTOR CALL August 3, 2018 Exhibit 99.2
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: Use of Non-GAAP Financial Measures
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 net income and diluted earnings per share, the Company also provides guidance based on adjusted ne
Slide 4: Agenda
Scott Prochazka President and CEO CenterPoint Vision and Strategy Second Quarter Results Business Segment Highlights Houston Electric Natural Gas Distribution Energy Services Midstream Investments Full-Year Outlook Bill Rogers Chief Financial Officer Financials Overview Business Segment Performance
Slide 5: CenterPoint Vision and Strategy
CenterPoint Vision and Strategy Our Vision: Lead the nation in delivering energy, service and value Our Strategy: Operate, Serve, Grow Ensure safe, reliable, efficient and environmentally responsible energy delivery businesses Utilize new and innovative technology to enhance performance Add value to
Slide 6: Second Quarter 2018 Performance
Second Quarter 2018 Performance (1) Refer to slide 28 for reconciliation to GAAP measures and slide 3 for information on non-GAAP measures (2) Utility Operations EPS includes all earnings except those related to Midstream Investments (Utility Operations EPS includes the Enable Series A Preferred Uni
Slide 7: Electric Transmission and Distribution Highlights
Electric Transmission and Distribution Highlights(1) TDU core operating income was $167 million in Q2 2018 compared with $151 million in Q2 2017 TDU core operating income was $266 million in 1H 2018 compared to $217 million in 1H 2017 Added more than 34,000 electric customers year-over-year TCOS fil
Slide 8: Natural Gas Distribution and Energy Services Highlights
Natural Gas Distribution and Energy Services Highlights Natural Gas Distribution Operating income was $7 million in Q2 2018 compared with $42 million in Q2 2017 Operating income was $163 million in 1H 2018 compared to $210 million in 1H 2017 Added more than 29,000 natural gas distribution customers
Slide 9: Midstream Investments Highlights
Midstream Investments Highlights Achieved a company all-time high for quarterly natural gas gathered volumes and processed volumes(1) In Q2 2018, Enable connected 20 new wells in the SCOOP and STACK plays with peak one-day natural gas flows of greater than 10 MMcf/d Project Wildcat began operating a
Slide 10: 2018 Full-Year Outlook
2018 Full-Year Outlook Tax Reform Equity Return(3) Utility rate relief and continued customer growth Increased contribution from Energy Services Increased earnings per Enable Midstream Partners’ forecast(4) Anticipate 2018 EPS growth will be driven by: (1) Refer to slide 30 for reconciliation to GAA
Slide 11: Agenda
Agenda Scott Prochazka President and CEO CenterPoint Vision and Strategy Second Quarter Results Business Segment Highlights Houston Electric Natural Gas Distribution Energy Services Midstream Investments Full-Year Outlook Bill Rogers Chief Financial Officer Financials Overview Business Segment Perfo
Slide 12: CenterPoint Financials Overview
CenterPoint Financials Overview Guidance basis EPS versus GAAP EPS Guidance basis EPS removes the mark-to-market impacts of ZENS securities and the related stocks and mark-to-market items related to our Energy Services business Guidance and GAAP EPS include earnings from Enable, inclusive of mark-to
Slide 13: Electric Transmission and Distribution Operating Income Drivers Q2 2017 v Q2 2018
Electric Transmission and Distribution Operating Income Drivers Q2 2017 v Q2 2018 (1) Excludes transition and system restoration bonds; please refer to slide 27 for core operating income reconciliation measures and to slide 3 for information on non-GAAP measures (2) The retrospective adoption of ASU
Slide 14: Natural Gas Distribution Operating Income Drivers Q2 2017 v Q2 2018
Natural Gas Distribution Operating Income Drivers Q2 2017 v Q2 2018 (1) The retrospective adoption of ASU 2017-07 resulted in an increase to 2017 operating income of $5 million and a corresponding decrease to other income (2) Includes rate increases, exclusive of the TCJA impact (3) Includes the tim
Slide 15: Utility Operations Adjusted Diluted EPS Drivers Q2 2017 v Q2 2018
Utility Operations Adjusted Diluted EPS Drivers Q2 2017 v Q2 2018 (Guidance Basis)(5) (1) Excludes equity return; please refer to slide 27 for core operating income reconciliation measures and to slide 3 for information on non-GAAP measures. Utilizes the 2017 tax rate (benefit of 2018 tax rate captu
Slide 16: Consolidated Adjusted Diluted EPS Drivers Q2 2017 v Q2 2018
Consolidated Adjusted Diluted EPS Drivers Q2 2017 v Q2 2018 (Guidance Basis)(1) Utility Operations Midstream Investments $0.29 $0.30 Midstream Investments Utility Operations (1) Excluding $34 million of pre-tax costs ($27 million of operating income and $7 million of interest) associated with the pe
Slide 17: Consolidated Adjusted Diluted EPS Drivers Six Months Ended June 30
Consolidated Adjusted Diluted EPS Drivers Six Months Ended June 30, 2017 vs June 30, 2018 (Guidance Basis)(1) Utility Operations Midstream Investments $0.66 $0.85 Midstream Investments Utility Operations (1) Excluding $34 million of pre-tax costs ($27 million of operating income and $7 million of in
Slide 18: Pending Merger Timeline and Financing
Pending Merger Timeline and Financing Aug Sep Oct Nov Dec 2019 Anticipated Q1 2019 Close Jul Early Termination of HSR Waiting Period Permanent Financing for acquisition of Vectren common may include Common Equity, Mandatory Convertibles, Other High-Equity Content Securities, and Debt Issuance VVC Sh
Slide 19: Credit Outlook
Credit Outlook Current Ratings and Outlook Moody’s S&P Fitch Company/Instrument Rating Outlook (1) Rating CreditWatch (2) Rating Outlook (3) CenterPoint Energy Senior Unsecured Debt Baa1 Negative BBB+ Negative BBB Stable Houston Electric Senior Secured Debt A1 Stable A Negative A+ Stable CERC Corp.
Slide 20: Combined Company Rate Base Growth
Note: CenterPoint rate base numbers are based upon the capital plan included in the 2017 Form 10-K; Vectren rate base numbers as provided on slide 15 of Vectren’s Q2 2018 Financial Review published on August 2, 2018 (1) The year-end annual rate base is subject to change due to actual capital investm
Slide 21: Agenda
Agenda Scott Prochazka President and CEO CenterPoint Vision and Strategy Second Quarter Results Business Segment Highlights Houston Electric Natural Gas Distribution Energy Services Midstream Investments Full-Year Outlook Bill Rogers Chief Financial Officer Financials Overview Business Segment Perfo
Slide 22: ZENS
ZENS The AT&T Inc. (T) acquisition of Time Warner Inc. (TWX) closed June 14, 2018 Upon closing of the acquisition, CenterPoint received $53.75 and 1.437 shares of AT&T Inc. for each share of Time Warner Inc.; cash proceeds of $382 million In accordance with the terms of the ZENS, CenterPoint remitte
Slide 23: Combined 2020 EPS Potential
Combined 2020 EPS Potential (in millions, except per share amounts) 2020 CenterPoint Net Income Forecast (High-end of $1.50 - $1.60 2018 guidance basis EPS range with 5 - 7% growth in 2019 and 2020)(1) $764 - $794 Vectren Net Income Forecast (Midpoint of $2.80 - $2.90 2018 guidance basis EPS range w
Slide 24: Electric Transmission and Distribution Q2 2018 Regulatory Update
Electric Transmission and Distribution Q2 2018 Regulatory Update Mechanism Docket # Annual Increase (Decrease) (1) ($ in millions) Filing Date Effective Date Approval Date Additional Information DCRF 48226 30.9 April 2018 September 2018 TBD Unanimous settlement agreement results in incremental annua
Slide 25: Natural Gas Distribution Q2 2018 Regulatory Update
Natural Gas Distribution Q2 2018 Regulatory Update Jurisdiction Mechanism Docket # Annual Increase (Decrease) (1) ($ in millions) Filing Date Effective Date Approval Date Additional Information South Texas (RRC) Rate Case 10669 (1.0) November 2017 May 2018 May 2018 Unanimous settlement agreement app
Slide 26: Natural Gas Distribution Q2 2018 Regulatory Update
Natural Gas Distribution Q2 2018 Regulatory Update Jurisdiction Mechanism Docket # Annual Increase (Decrease) (1) ($ in millions) Filing Date Effective Date Approval Date Additional Information Minnesota (MPUC) Rate Case G008/GR-17-285 56.5 August 2017 TBD TBD Reflects a proposed 10.0% ROE on a 52.1
Slide 27: Reconciliation: Operating Income to Core Operating Income
Reconciliation: Operating Income to Core Operating Income
Slide 28: Reconciliation: Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS
Reconciliation: Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS Used in Providing Annual Earnings Guidance
Slide 29: Reconciliation: Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS
Reconciliation: Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS Used in Providing Annual Earnings Guidance
Slide 30: Reconciliation: Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS
Reconciliation: Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS Used in Providing Annual Earnings Guidance
Slide 31: Estimated Amortization for Pre-Tax Equity Earnings
Estimated Amortization for Pre-Tax Equity Earnings Associated with the Recovery of Certain Qualified Cost and Storm Restoration Costs ** The table provides the pre-tax equity return recognized by CenterPoint Energy, Inc. (CenterPoint Energy) during each of the years 2005 through June 30, 2018 relate