Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Q2 2015 Earnings Presentation
23 slides from Centerpoint Energy, Inc (holding Co)'s earnings presentation, Aug 10, 2015
Slide 1: Second Quarter 2015 Earnings Call
Exhibit 99.2 Second Quarter 2015 Earnings Call • Regulatory Update • Guidance Reaffirmed • Dividend to Grow with Earnings August 10, 2015
Slide 2: Cautionary Statement
Cautionary Statement Thispresentationcontainsstatementsconcerningour expectations,beliefs,plans,objectives,goals,strategies,futureeventsor performanceor underlyingassumptions(includingfuture dividends)and other statements that are not historical facts. These statements are “forward-looking statement
Slide 3: Scott Prochazka – President and CEO: Earnings Call Discussion Highlights
Scott Prochazka – President and CEO Earnings Call Discussion Highlights Solid Second Quarter Results Utility Operations Update MidstreamInvestment Update investors.centerpointenergy.com 3
Slide 4: Second Quarter 2015 Performance Highlights
Second Quarter 2015 Performance Highlights Q2 GAAP EPS $0.25 $0.18 $0.11 $0.06 $0.12 $0.14 2015 2014 Q2 EPS on a Guidance Basis Q2 2015 vs Q2 2014 Drivers (EPS on a Guidance Basis) $0.19 $0.21 Rate Relief Midstream $0.06 $0.11 Investments $0.13 $0.10 Customer Growth Equity Return 2015 2014 related t
Slide 5: Midstream Investments Enable Q2 Outlook
Midstream Investments Enable Q2 Outlook 3-7% per unit distribution growth outlook for 2016 and 2017 Enable 2016 volume growth outlook High single digit growth in natural gas gathering volumes ~25% growth in natural gas processing volumes Doubling of crude oil gathering volumes Producers continue to
Slide 6: Severe Storms Impacted Houston in April, May and June
Severe Storms Impacted Houston in April, May and June investors.centerpointenergy.com 6
Slide 7: Tracy Bridge – EVP & President, Electric Division
Tracy BridgeEVP – & President, Electric Division Earnings Call Discussion Highlights Electric Results Houston Growth Regulatory Update Raising our high voltage transmission towers to accommodate the new Highway US-99 corridor and to serve load growth investors.centerpointenergy.com 7
Slide 8: Electric Transmission and Distribution Operating Income Drivers
Electric Transmission and Distribution Operating Income Drivers:nd2Quarter 2014 vs 2nd Quarter 2015 $160 $5 $8 $140 $13 ($5) ($2) ($3) $120 $100 $80 $131 $131 $60 $115 2% YoY 2% YoY Customer O&M Growth1 Increase2 $40 $20 $- 3 Q2 2014 TDU Usage, Customer Rate relief Equity Return, O&M expense Depreci
Slide 9: Houston Electric: Residential Customers and Weather Normalized Residential Load vs. Houston Employment
Houston Electric: Residential Customers and Weather Normalized Residential Load vs. Houston Employment Over 2% residential customer compound annual growth rate since 1990 Residential customer count grew 46,484 Q2 2014 to Q2 2015 1 2 1 2015 Residential customer growth rate through June 30, 2015: 2% a
Slide 10: Electric Transmission and Distribution: Regulatory Update
Electric Transmission and Distribution: Regulatory Update Rate Filings: Expected Annual Revenue Mechanism Comments Docket # Effective DateIncrease- $MM $13.0 Settlementunanimously approved on DCRF Sept 2015 44572 (Settlement) July 30, 2015 Filed on June 26, 2015; based on an TCOS 3Q2015 $13.7 increm
Slide 11: Joe McGoldrick – EVP & President, Gas Division
Joe McGoldrickEVP – & President, Gas Division Earnings Call Discussion Highlights Gas Operations Results RegulatoryUpdate Minnesota Belt Line Project Energy Services Update Using horizontal directional drilling to construct and install a new pipeline under the bed of the Arkansas River investors.cen
Slide 12: Natural Gas Utilities Operating Income Drivers
Natural Gas Utilities Operating Income Drivers: 2nd Quarter 2014 vs2nd Quarter 2015 $35 $30 $1 $0 $25 ($5) ($1) $20 ($6) $15 $30 1% YoY 1% YoY Customer $26 O&M Growth1 Growth2 $10 $19 $19 $5 $0 Q2 2014 Gas Usage, primarily Customer Rate relief O&M expense Depreciation and Q2 2015 Gas Utility Operati
Slide 13: Natural Gas Utilities: Regulatory Update
Natural Gas Utilities: Regulatory Update Rate Filings (in process): Expected Annual Revenue Jurisdiction Comments Docket# Effective Date Increase- $MM Rate case filed August 3, 2015;based Interim Rates1: $54.1 Minnesota on a 10.3% ROE and $213MM increase15-424 October 2015 (Requested) in rate base P
Slide 14: Minnesota Belt Line Project
Minnesota Belt Line Project The Belt Line Supplies gas to more than 600,000 customers in the Minneapolis area Replaces over 60 miles of 20’’ and 24’’ coupled steel pipe installed primarily in the 1950s The project is in its th4year and is expected to be completed in 2023, requiring over $400 million
Slide 15: Energy Services Operating Income Drivers
Energy Services Operating Income Drivers: 2nd Quarter 2014 vs 2nd Quarter 2015 $12 $10 $8 $1 $1 $6 $4 $7 1.8% YoY Lower $5 Customer O&M $2 Growth3 $0 Q2 2014 Energy Services Margin and Other O&M Expense Q2 2015 Energy Services Operating Income 1 2 Operating Income 1 Operating income as reported in Q
Slide 16: Bill Rogers – EVP & CFO
Bill RogersEVP – & CFO Earnings Call Discussion Highlights Quarterly Drivers Dividend to Growwith Earnings Financing Plan GuidanceReaffirmed investors.centerpointenergy.com 16
Slide 17: Q2 EPS Normalization GAAP to Guidance Basis to Baseline
Q2 EPS Normalization GAAP to Guidance Basis to Baseline Quarter Ended Quarter Ended June 30, 2014 June 30, 2015 Net Income EPS Net Income EPS (in millions) (in millions) Consolidated as reported $ 107 $ 0.25 $ 77 $ 0.18 Midstream Investments (44) (0.11) (27) (0.06) (1) Utility Operations 63 $ 0.14 5
Slide 18: 2014 Q2 Baseline EPS to 2015 Q2 EPS on a Guidance Basis
2014 Q2 Baseline EPS to 2015 Q2 EPS on a Guidance Basis Quarter Ended Quarter Ended June 30, 2014 June 30, 2015 Net Income EPS Net Income EPS (in millions) (in millions) Consolidated as reported $ 107 $ 0.25 $ 77 $ 0.18 Midstream Investments (44) (0.11) (27) (0.06) (1) Utility Operations 63 $ 0.14 5
Slide 19: Dividend Growth Outlook
Dividend Growth Outlook CenterPoint is targeting 4-6% annual EPS growth on a guidance basis through 2018, inclusive of Midstream Investments Annual dividend growth in line with EPS growth CenterPoint’s consolidated payout ratio is expected to remain above 90% with a utility operations payout ratio o
Slide 20: Financing Plan: Utilize Debt Capacity and Limited Equity Issuance
Financing Plan Utilize Debt Capacity and Limited Equity Issuance 2 Expect to source majority of financing needs through CNP has substantially reduced commercial paper borrowings and fixed rate debt leverage over the last five years 70.0% 2015 66.0% 62.0% $200 million matured in June 2015 58.0% 54.0%
Slide 21: Appendix
Appendix 2
Slide 22: Reconciliation: Net Income and diluted EPS to the Basis Used in Providing Annual Earnings Guidance
Reconciliation: Net Income and diluted EPS to the Basis Used in Providing Annual Earnings Guidance Quarter Ended Quarter Ended June 30, 2015 June 30, 2014 Net Income EPS Net Income EPS (in millions) (in millions) Consolidated as reported $ 77 $ 0.18 $ 107 $ 0.25 Midstream Investments (27) (0.06) (44
Slide 23: 2014 EPS Reconciliation to 2015 Utility Operations Guidance Range
2014 EPS Reconciliation to 2015 Utility Operations Guidance Range of $0.71 to $0.75 per diluted share 2014 Fully Diluted EPS $ 1.42 For 2014, normalized $0.76 of fully Onan adjusted guidance basis: adjusted earnings to a baseline of $0.70. ZENS-related mark to market gains (0.12) CES MTM gain (0.04)