Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Investor Presentation (March 2016)
31 slides from Centerpoint Energy, Inc (holding Co)'s investor presentation, Mar 4, 2016
Slide 1: Introduction to CenterPoint Energy
Focused on Energy Delivery, Positioned to Execute Introduction to CenterPoint Energy March 2016 A Fortune 500 company included in the: S&P 500 Index S&P 500 Utility Index Dow Jones Utility Average Index PHLX Utility Sector Index Russell 1000 Index Exhibit 99.1
Slide 2: Cautionary Statement
Cautionary Statement This presentation and the oral statements made in connection herewith may contain statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future operations, events, financial position, earnings, growth, revenues costs, prospects, objectives, capita
Slide 3: Agenda
Agenda Overview Review of Business Segments Electric Transmission and Distribution Natural Gas Distribution Energy Services Midstream Investments Earnings Guidance Appendix
Slide 4: Business Segment Overview
As of and for the year ended December 31, 2015 Operating Income Total Assets Electric Transmission and Distribution $607 $10,049 Natural Gas Distribution $273 $5,657 Energy Services $42 $857 Midstream Investments $2,594 Other $11 $2,902 Reconciling Eliminations (725) Consolidated $21,334 Business Se
Slide 5: CenterPoint Energy: Regulated Electric and Natural Gas Utility
CenterPoint Energy, Inc. (NYSE: CNP) Regulated Electric and Natural Gas Utility Serving more than 5.7 Million Customers Electric Transmission & Distribution: Electric utility operations with ~2.3 million metered customers across ~5,000 square miles in and around Houston, Texas 19th largest U.S. inve
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's Value Proposition
CenterPoint Energy’s Value Proposition Focused on delivering long-term value for all stakeholders Targeting 4-6% year-over-year EPS growth through 2018 Strong operating cash flow and balance sheet Solid historical dividend growth expected to continue Future capital investment in transmission and dis
Slide 8: Improving Customer Satisfaction while Reducing Carbon Emissions
Improving Customer Satisfaction while Reducing Carbon Emissions Electric T&D Utility Technology Absence of generation assets significantly reduces CenterPoint’s carbon footprint compared to integrated utilities One of the first large scale Smart Meter deployments in the U.S. Intelligent Grid initiat
Slide 9: Responsibility to the Environment
Responsibility to the Environment Conservation Improvement & Energy Efficiency Programs In 2014, conservation programs in four natural gas jurisdictions helped our customers save nearly 2 billion cubic feet of natural gas (energy cost savings of $16.2 million); savings reduced our customers’ total c
Slide 10: 2015 Highlights
2015 Highlights Strong customer growth - nearly 80,000 new utility customers 2% electric metered customer growth 1% natural gas utilities customer growth Received nearly $90 million in annualized rate relief from 2015 filings, excluding interim rates ROEs near authorized levels at both electric and
Slide 11: Houston Electric – Overview
Houston Electric – Overview ~2.3 million metered customers; ~5,000 square miles in and around Houston, Texas Consistent residential customer growth of ~2% Dec. 2015 average residential electric price in TX: $0.113/kwh (1) Has consistently earned at or near its 10% authorized ROE Capital recovery mec
Slide 12: Houston Electric – Steady Customer Growth Continues
Houston Electric – Steady Customer Growth Continues Residential Customers / Houston Employment Weather Normalized Residential GWH Usage Sources: (1) Company Provided (2) Texas Workforce Commission (Houston, Sugarland, Woodlands Metro) Chart shown is from Q2 2015 earnings call materials 1 1 2
Slide 13: $3.7 Billion 2016–2020 Capital Plan
$3.7 Billion 2016 – 2020 Capital Plan (1) $ Millions Brazos Valley Connection ($270-$310 million from 2016 into 2018) Reliability and resiliency Customer growth Infrastructure improvements Technology improvements Capital plan addresses: (1) Includes AFUDC Electric Transmission and Distribution Capit
Slide 14: Gas Operations – Overview
Gas Operations – Overview Natural Gas Utilities Six state footprint with vibrant metropolitan areas of Houston and Minneapolis ~3.4 million customers ~1% annual customer growth since 2010 Recently named 2nd in the South Region in J.D. Power 2015 Customer Satisfaction Study Earning at allowed returns
Slide 15: Natural Gas Utilities Capital Investment Growth
Natural Gas Utilities Capital Investment Growth $ Millions Capital plan addresses: Aging infrastructure Minnesota Belt Line Project Customer growth Public improvement requirements $2.3 Billion 2016 – 2020 Capital Plan
Slide 16: CenterPoint Energy Services (CES) Overview
CenterPoint Energy Services (CES) Overview Competitive natural gas supply and related energy services (1) Non-regulated operations Complementary to natural gas utilities ~18,000 commercial and industrial customers across 19 states Low Value at Risk business model – storage and transportation capacit
Slide 17: CNP Signs Agreement to Acquire Continuum's Retail Energy Services Business
CNP Signs Agreement to Acquire Continuum’s Retail Energy Services Business Acquisition includes Continuum’s retail business, Choice customers, and origination & logistics assets Aggregate purchase price for the acquisition is $77.5 million plus working capital Acquisition complements overall natural
Slide 18: Enable Midstream Partners, LP Ownership Structure
Enable Midstream Partners, LP Ownership Structure 18.3% LP ownership Enable Midstream Partners, LP NYSE: ENBL Transportation and Storage Gathering and Processing 50% Management Interest / 60% Economic Interest 50% Management Interest / 40% Economic Interest Incentive Distribution Rights Public Unith
Slide 19: Forward-looking Statements and Non-GAAP Financial Measures
Forward-looking Statements and Non-GAAP Financial Measures Forward Looking Statements This presentation and the oral statements made in connection herewith may contain “forward-looking statements” within the meaning of the securities laws. All statements, other than statements of historical fact, re
Slide 20: Producers Remain Active In The Anadarko Basin
Producers Remain Active In The Anadarko Basin Rig data per Drillinginfo as of February 9, 2016 Baker Hughes rig count data as of February 12, 2016; Cana/STACK/SCOOP represents the Cana Woodford in Baker Hughes nomenclature and includes rigs located in Dewey, Blaine, Canadian and Grady counties, Okla
Slide 21: Transportation And Storage Revenue Profile
Transportation And Storage Revenue Profile The majority of the Transportation and Storage segment revenues are from Firm Contracts Firm Contracts provide fixed revenues from monthly reservation charges Firm Contracts are held by a diversified portfolio of customers including major utilities, power g
Slide 22: 2016 Capital Outlook
2016 Capital Outlook Enable previously announced the reduction of its 2016 expansion capital to $375 million The majority of the reduced capital was gathering, compression and processing capital, including delaying the in-service date of the 200 MMcf/d Wildhorse Processing Plant to late 2017 The 201
Slide 23: Commodity Exposure
Commodity Exposure Enable targets firm, fee-based contracts Certain gathering and processing contracts have provisions to protect against low commodity price environments and volume decreases Commodity sensitivities, including the impact of hedges: A 10% increase or decrease in natural gas and ethan
Slide 24: 2016 Earnings Guidance
2016 Earnings Guidance Guidance Provided on Feb. 26, 2016 Midstream Investments $0.31 2015 Consolidated EPS: $1.10 Utility Operations 2016 Consolidated EPS: $1.12 -$1.20 2015 2016 2017 2018 $0.79 $0.88 to $0.92 $0.24 to $0.28 4-6% YoY EPS Growth Earnings from Utility Operations were ~70% of overall
Slide 25: Additional Reference Materials
Additional Reference Materials Category Reference Material Link Financial Information Quarterly Financial Tables http://investors.centerpointenergy.com/results.cfm Debt & Maturity Schedules Equity Return Amortization Schedules Supplemental Year End Materials Regulatory Information State Commission W
Slide 26: Appendix
Appendix
Slide 27: Strategic Update
Core strategy is to invest organically to grow and strengthen our current utility service territories In January, announced two investments that are expected to be EPS accretive: $363 million investment in Enable Midstream Partners’ 10% perpetual preferred securities; closed on February 18, 2016 Acq
Slide 28: Regulatory Mechanisms
Regulatory Mechanisms Houston Electric Distribution Cost Recovery Factor (DCRF) – filed annually Transmission Cost of Service (TCOS) – eligible to file 2 times per year Gas Operations Infrastructure Capital Cost Recovery Texas Gas Reliability Infrastructure Program (GRIP) Arkansas Main Replacement P
Slide 29: Liquidity and Capital Resources
2015 Record year with $1.6 billion total capital investment Cash flow covered all capital expenditures in 2015 Borrowing(1) increased ~$330 million 2016 Anticipate strong balance sheet and cash flow No external sources or cash from operations were needed to finance $363 million investment in Enable’
Slide 30: Interest Expense and Annual Tax Rates
Interest Expense and Annual Tax Rates Interest Expense 2015 full-year interest expense was lower than 2014 (1) Partial year impact of financing activities in 2015, including retirement of $270 million of CNP Inc. debt 2016 full-year interest expense is projected to be lower than 2015 Full year impac
Slide 31: Reconciliation: Net Income and Diluted EPS to Guidance Basis
Note: Refer to slide 2 for information on non-GAAP measures; for more information, refer to Investor News and 4Q 2015 earnings materials on our website Reconciliation: Net Income and diluted EPS to the Basis Used in Providing 2015 Earnings Guidance
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