Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Q2 2020 Earnings Presentation
23 slides from Centerpoint Energy, Inc (holding Co)'s earnings presentation, Aug 6, 2020
Slide 1: 2nd Quarter 2020 Investor Update
2ND QUARTER 2020 INVESTOR UPDATE AUGUST 6, 2020
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
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 income (loss) available to common shareholders and diluted earnings (loss) per share, CenterPoint En
Slide 4: Key Takeaways
KEY TAKEAWAYS Strong Second Quarter Utility Performance Organic customer growth, O&M management and rate relief more than offset COVID-19 impacts Mitigating COVID-19 Impact Constructive regulatory mechanisms currently in place for all jurisdictions Disciplined O&M Management Continued focus results
Slide 5: Second Quarter 2020 Highlights
SECOND QUARTER 2020 HIGHLIGHTS UTILITY OPERATIONS Second quarter 2020 consolidated earnings of $0.11 diluted EPS $0.18 Utility EPS on a guidance basis (non-GAAP), inclusive of COVID-19 impacts Capital Investment Disciplined O&M Regulatory Investment Grade & Growth Management Strategy Credit Quality
Slide 6: Q2 2020 v Q2 2019 Guidance Basis EPS Drivers for Continuing Operations
Q2 2020 V Q2 2019 GUIDANCE BASIS (NON-GAAP) EPS DRIVERS FOR CONTINUING OPERATIONS (1) Utility Operations(2) $0.01 $0.00 $0.09 Midstream $0.04 Investments $0.02 Primary Drivers Primary Drivers Primary Drivers Primary Drivers $0.02 O&M $0.01 O&M $0.04 Rate Relief $0.03 Net $0.03 Management Man
Slide 7: COVID-19 Pandemic Update
COVID-19 PANDEMIC UPDATE OPERATIONS & REGULATORY • Safety and well-being of CenterPoint’s customers, employees, contractors and the communities we serve remain our top priorities • No material impact on field operations or customer service • Capital projects remain on target – no significant constru
Slide 8: COVID-19 Pandemic Update: Q2 Demand Sensitivities & FY Guidance Assumptions
COVID-19 PANDEMIC UPDATE Q2 DEMAND SENSITIVITIES & FY GUIDANCE ASSUMPTIONS Q2 2020 Impacts Q2 2020 Estimated Demand Impact (1) • “Stay-at-home” practices yielding negative demand impacts Houston Indiana Natural Gas associated with electric commercial and small industrial customer Electric Electric D
Slide 9: Indiana IRP Update: Preferred Portfolio
INDIANA IRP UPDATE PREFERRED PORTFOLIO (1) Proposed replacement of 730 MWs of Coal with approximately 700 – 1,000 MWs of Solar & Solar + Storage, 300 MWs of Wind, 460 MWs of natural gas CTs and 30 MWs of demand response Natural Gas Expected Key Characteristics of Proposed IRP 2020E Resource Mix 12%
Slide 10: Indiana IRP Update: Preferred Portfolio Timeline
INDIANA IRP UPDATE PREFERRED PORTFOLIO TIMELINE (1) 10 Note: Refer to slide 2 for information on forward-looking statements. IRP – Integrated Resource Plan; ELG – Effluent Limitation Guidelines; MW – Megawatt (1) Subject to change based on availability and approval
Slide 11: Execution of Core Utility Strategy
EXECUTION OF CORE UTILITY STRATEGY COMPLETION OF SALE OF NON-UTILITY ASSETS Transaction Details Strategic Rationale Infrastructure Services(1) Improves Business Risk Profile (4) ― Sale closed April 9, 2020 Strengthens Balance Sheet and ― Sales price $850 million; net-after tax Credit Quality(5
Slide 12: Strengthening Credit Quality
STRENGTHENING CREDIT QUALITY COMMITTED TO INVESTMENT-GRADE CREDIT CenterPoint has successfully executed a utility-focused strategy designed to improve its business risk profile and strengthen the balance sheet Diversified regulated utility asset base across the mid-continent region Target a strong
Slide 13: Reiterate 2020-2024 Guidance Basis Utility EPS Outlook
REITERATE 2020 – 2024 GUIDANCE BASIS UTILITY EPS OUTLOOK Robust regulated utility growth plan drives expected 5-7% utility growth 5 – 7% Guidance Basis Utility EPS CAGR ~$13 billion 5-year capital investment plan through 2024 7.5% rate base CAGR from 2019 – 2024 $1.10 – $1.20(1) Top quartile c
Slide 14: Appendix
e CenterPoint: Energy APPENDIX
Slide 15: Electric Operations Q2 2020 Regulatory Update
ELECTRIC OPERATIONS Q2 2020 REGULATORY UPDATE Annual Increase Filing Effective Approval Mechanism (Decrease) (1) Additional Information Date Date Date (in millions) CenterPoint Energy and Houston Electric (PUCT) The requested amount is comprised primarily of the following: 2021 Program and EECRF (1)
Slide 16: Natural Gas Distribution Q2 2020 Regulatory Update
NATURAL GAS DISTRIBUTION Q2 2020 REGULATORY UPDATE Annual Increase Filing Effective Approval Mechanism (Decrease) (1) Additional Information Date Date Date (in millions) CenterPoint Energy and CERC - Beaumont/East Texas (Railroad Commission) Unanimous settlement agreement approved by the Railroad Co
Slide 17: Natural Gas Distribution Q2 2020 Regulatory Update
NATURAL GAS DISTRIBUTION Q2 2020 REGULATORY UPDATE Annual Increase Filing Effective Approval Mechanism (Decrease) (1) Additional Information Date Date Date (in millions) CenterPoint Energy - Indiana South - Gas (IURC) Requested an increase of $13 million to rate base, which reflects a $1 million ann
Slide 18: 2020 EPS Guidance Basis Considerations
2020 EPS GUIDANCE BASIS CONSIDERATIONS Translating Enable Guidance to CenterPoint’s Portion (in millions, except percentages and per share items) Guidance basis EPS before allocation of Corporate & Other Enable Net Income Attributable $195 - $235(2) to Common Units Midstream Utility Operations Corpo
Slide 19: Reconciliation: Income and Diluted EPS to Adjusted Income and Adjusted Diluted EPS
RECONCILIATION: INCOME (LOSS) AND DILUTED EARNINGS (LOSS) PER SHARE TO ADJUSTED INCOME AND ADJUSTED DILUTED EPS USED IN PROVIDING ANNUAL EARNINGS GUIDANCE Quarter Ended June 30, 2020 CES (1) & CIS (2) Midstream Corporate and Utility Operations Investments Other (6) (Disc. Operations) Consolidated Do
Slide 20: Reconciliation: Income and Diluted EPS to Adjusted Income and Adjusted Diluted EPS
RECONCILIATION: INCOME (LOSS) AND DILUTED EARNINGS (LOSS) PER SHARE TO ADJUSTED INCOME AND ADJUSTED DILUTED EPS USED IN PROVIDING ANNUAL EARNINGS GUIDANCE Quarter Ended June 30, 2019 Midstream Corporate and CES (1) & CIS (2) (6) Utility Operations Investments Other (Disc. Operations) Consolidated Do
Slide 21: CenterPoint Energy Adjusted Parent Debt as a Percentage of Total Debt
CENTERPOINT ENERGY ADJUSTED PARENT DEBT AS A PERCENTAGE OF TOTAL DEBT 12/31/2019 3/31/2020 6/30/2020 ($ in millions) Short-term Debt: Short-term borrowings $ - $ - $ 19 Current portion of transition and system restoration bonds 231 204 206 Indexed debt (ZENS)** 19 18 17 Current portion of other long
Slide 22: Consolidated Adjusted Cash From Operations Pre-Working Capital
CENTERPOINT ENERGY CONSOLIDATED ADJUSTED CASH FROM OPERATIONS PRE-WORKING CAPITAL Year Ended December 31, 2019 ($ in millions) Net cash provided by operating activities 1,638 Less: Changes in other assets and liabilities Accounts receivable and unbilled revenues, net (226) Inventory 52 Taxes receiva
Slide 23: Ratio of Adjusted Cash From Operations Pre-Working Capital to Adjusted Total Debt
CENTERPOINT ENERGY CONSOLIDATED RATIO OF ADJUSTED CASH FROM OPERATIONS PRE-WORKING CAPITAL/ADJUSTED TOTAL DEBT Year Ended December 31, 2019 ($ in millions) Short-term Debt: Short-term borrowings - Current portion of transition and system restoration bonds 231 Indexed debt (ZENS)** 19 Current portion
CenterPoint Energy, Inc (Holding Co) — Q2 2020 Earnings Presentation on 6ix