Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Q3 2018 Earnings Presentation
31 slides from Centerpoint Energy, Inc (holding Co)'s earnings presentation, Nov 8, 2018
Slide 1: 3rd Quarter 2018 Investor Call
3rd QUARTER 2018 INVESTOR CALL November 8, 2018 Exhibit 99.2
Slide 2: Forward-looking statements
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 fact included in this
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 Integration Planning and Capital Update Third Quarter Results Business Segment Highlights Houston Electric Natural Gas Distribution Energy Services Midstream Investments Full-Year Outlook Bill Rogers Chief Financial Officer Business Segment Performance Utility Opera
Slide 5: Integration Details and Timeline
CenterPoint Energy – Integration Details and Timeline Anticipate Q1 2019 close, pending the closing of dockets at the IURC and OPUC We continue to anticipate $50 to $100 million in potential 2020 pre-tax earnings from commercial opportunities and cost savings(1) Completed financings:(2) $800 million
Slide 6: Capital Update: Capital Investment Expected to Increase
Capital Update Capital Investment Expected to Increase CenterPoint is currently developing the 2019 – 2023 capital plan; anticipate capital expenditures will increase 5 – 10% versus the 2018 – 2022 plan(1) Freeport Master Plan project costs of $250 million in the 2018 – 2022 plan; updated cost estim
Slide 7: Third Quarter 2018 Performance
Third Quarter 2018 Performance (1) Refer to slide 29 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 Unit
Slide 8: Electric Transmission and Distribution Highlights
Electric Transmission and Distribution Highlights(1) TDU core operating income was $214 million in Q3 2018 compared with $236 million in Q3 2017, in line with our expectations More than 39,000 electric customers added year-over-year TCOS annual increase of $41 million effective as of July 2018 DCRF
Slide 9: Natural Gas Distribution and Energy Services Highlights
Natural Gas Distribution and Energy Services Highlights Natural Gas Distribution Operating income was $3 million in Q3 2018 compared with $25 million in Q3 2017, in line with our expectations Almost 29,000 natural gas distribution customers added year-over-year Energy Services(1) Core operating loss
Slide 10: Midstream Investments Highlights
Midstream Investments Highlights Enable achieved record quarterly natural gas gathered, natural gas processed, natural gas liquids produced and crude oil gathered volumes(1) Enable anticipates performance at the upper end of the 2018 Net Income Attributable to Common Units range of $375 - $445 milli
Slide 11: 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) Anticipated 2018 EPS growth drivers include: (1) Refer to slide 31 for reconciliation to GAAP
Slide 12: Agenda
Scott Prochazka President and CEO Integration Planning and Capital Update Third Quarter Results Business Segment Highlights Houston Electric Natural Gas Distribution Energy Services Midstream Investments Full-Year Outlook Bill Rogers Chief Financial Officer Business Segment Performance Utility Opera
Slide 13: Electric Transmission and Distribution Operating Income Drivers
Electric Transmission and Distribution Operating Income Drivers Q3 2017 v Q3 2018 (1) Excludes transition and system restoration bonds; please refer to slide 28 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
Natural Gas Distribution Operating Income Drivers Q3 2017 v Q3 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
Utility Operations Adjusted Diluted EPS Drivers Q3 2017 v Q3 2018 (Guidance Basis)(5) (1) Excludes equity return; please refer to slide 28 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 Q3
Utility Operations Midstream Investments $0.38 $0.39 Midstream Investments Utility Operations (1) Excluding $15 million of pre-tax costs ($5 million of operating income, $10 million of net interest) plus $5 million of Series A Preferred Stock dividend requirements associated with the pending merger
Slide 17: Consolidated Adjusted Diluted EPS Drivers Nine Months
Consolidated Adjusted Diluted EPS Drivers Nine Months Ended September 30, 2017 vs September 30, 2018 (Guidance Basis)(1) Utility Operations Midstream Investments $1.04 $1.24 Midstream Investments Utility Operations (1) Excluding $49 million of pre-tax costs ($32 million of operating income, $17 mill
Slide 18: Recent Financings and The Road Ahead
Recent Financings and The Road Ahead
Slide 19: Recent Financing Summary
Recent Financing Summary Debt Financing(1) ($ in millions) 3.60% Unsecured Senior Notes Due 2021 $500 3.85% Unsecured Senior Notes Due 2024 500 4.25% Unsecured Senior Notes Due 2028 500 Total 1,500 Equity Financing(1) ($ in millions) Common Stock (New CenterPoint Shares: 69.6 Million Shares) $1,897
Slide 20: CenterPoint Energy Midstream (CNP Midstream)
CenterPoint Energy Midstream (CNP Midstream) CenterPoint completed the internal spin in September Moody’s and Fitch upgraded CERC’s credit rating as a result of the spin to Baa1 and BBB+, respectively CenterPoint exploring bank refinancing of current $900 million internal loan from the holding compa
Slide 21: Drivers of Potential 2020 Guidance EPS
Drivers of Potential 2020 Guidance EPS No anticipated issuance of equity in 2019 or 2020 Expect increasing CenterPoint capital investment versus the 2018 – 2022 plan Cost savings and commercial opportunities related to the merger Forecast good momentum in CenterPoint and Vectren commercial businesse
Slide 22: The Road Ahead: Q4 2018 Earnings Call Preview
The Road Ahead Q4 2018 Earnings Call Preview Provided that the pending merger with Vectren has closed, on the 4th quarter 2018 earnings call, we anticipate including the following: Capital expenditure and rate base growth projections Additional detail on cost savings Competitive businesses overview
Slide 23: Agenda
Agenda Scott Prochazka President and CEO Integration Planning and Capital Update Third Quarter Results Business Segment Highlights Houston Electric Natural Gas Distribution Energy Services Midstream Investments Full-Year Outlook Bill Rogers Chief Financial Officer Business Segment Performance Utilit
Slide 24: Electric Transmission and Distribution Q3 2018 Regulatory Update
Electric Transmission and Distribution Q3 2018 Regulatory Update Mechanism Docket # Annual Increase (Decrease) (1) ($ in millions) Filing Date Effective Date Approval Date Additional Information TCOS 48389 40.8 May 2018 July 2018 July 2018 Requested an increase of $285 million to rate base and refle
Slide 25: Natural Gas Distribution Q3 2018 Regulatory Update
Natural Gas Distribution Q3 2018 Regulatory Update Jurisdiction Mechanism Docket # Annual Increase (Decrease) (1) ($ 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 Q3 2018 Regulatory Update
Natural Gas Distribution Q3 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 3.9 August 2017 November 2018 July 2018 Includes a proposal to e
Slide 27: Natural Gas Distribution Q3 2018 Regulatory Update
Natural Gas Distribution Q3 2018 Regulatory Update Jurisdiction Mechanism Docket # Annual Increase (Decrease) (1) ($ in millions) Filing Date Effective Date Approval Date Additional Information Mississippi (MPSC) RRA 12-UN-139 3.2 May 2018 November 2018 November 2018 Based on authorized ROE of 9.144
Slide 28: Reconciliation: Operating Income to Core Operating Income
Reconciliation: Operating Income to Core Operating Income
Slide 29: Reconciliation: Net Income and Diluted EPS to Adjusted
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
Reconciliation: Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS Used in Providing Annual Earnings Guidance
Slide 31: Reconciliation: Net Income and Diluted EPS to Adjusted
Reconciliation: Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS Used in Providing Annual Earnings Guidance