Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Investor Presentation (March 2018)
28 slides from Centerpoint Energy, Inc (holding Co)'s investor presentation, Mar 16, 2018
Slide 1: Focused on Energy Delivery, Positioned to Execute
Focused on Energy Delivery, Positioned to Execute Introduction to CenterPoint Energy March 2018 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 For more information visit centerpointenergy.com Our
Slide 2: Forward-looking statements disclaimer
This presentation and the oral statements made in connection herewith contain statements concerning CenterPoint Energy, Inc.’s (“our,” “CenterPoint Energy,” or the “Company”)expectations, beliefs, plans, objectives, goals, strategies, future operations, events, financial position, earnings, growth,
Slide 3: Agenda
Agenda Overview Review of Business Segments Electric Transmission and Distribution Natural Gas Distribution Energy Services Midstream Investments Appendix
Slide 4: 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 5: CenterPoint Energy, Inc. business overview
CenterPoint Energy, Inc. (NYSE: CNP) Electric Transmission & Distribution Electric utility operations with ~2.4 million metered customers across ~5,000 square miles in and around Houston, Texas in 2017 88,636 GWh delivered in 2017 Natural Gas Distribution Regulated gas distribution jurisdictions in
Slide 6: Business Segment Overview
As of and for the year ended December 31, 2017 Operating Income / Equity Income Total Assets Electric Transmission and Distribution $610 $10,292 Natural Gas Distribution $328 $6,608 Energy Services $125 $1,521 Midstream Investments $265 $2,472 Other $9 $2,497 Reconciling Eliminations $(654) Consolid
Slide 7: CenterPoint Energy's Value Proposition
CenterPoint Energy’s Value Proposition Highlights from Q4 2017 Earnings Call on February 22, 2018 Targeting 2018 Guidance Basis EPS range of $1.50 - $1.60(1) Targeting 5 – 7% year-over-year earnings growth range for 2019 and 2020 Dividend Current Yield: 4.1%(2) Dividend Growth of ~4% in 2015, 2016 a
Slide 8: CenterPoint Energy's Value Proposition
CenterPoint Energy’s Value Proposition Strong operating cash flow and balance sheet Capital investment in transmission and distribution assets is expected to enable growth Capital recovery mechanisms at electric and natural gas utilities help reduce regulatory lag Environmental risks associated with
Slide 9: 2018 – 2020 Earnings Outlook
2018 – 2020 Earnings Outlook(1) As provided on Q4 2017 Earnings Call on February 22, 2018 The $1.55 guidance midpoint for 2018 represents 6% growth from $1.37 plus approximately $0.10 from the Tax Cuts and Jobs Act (TCJA) 2019 and 2020 year-over-year growth rate target of 5 – 7% Capital investment a
Slide 10: Business Segment: Electric Transmission and Distribution
Business Segment: Electric Transmission and Distribution Houston Electric ~2.4 million metered customers; ~5,000 square miles in and around Houston, Texas in 2017 Residential customer growth 2.4% in 2016 1.6% in 2017 Earned near its 10% authorized ROE in 2017 Transmission and distribution capital re
Slide 11: Electric T&D Capital Investment Outlook
Business Segment: Electric Transmission and Distribution Capital Investment Outlook 2017A 2018E 2019E 2020E 2021E 2022E Transmission 49% 43% 44% 49% 43% 36% Distribution 46% 49% 52% 48% 52% 57% (1) (1) Includes AFUDC Note: Current as of February 22, 2018, as provided on our Q4 2017 earnings call $4.
Slide 12: Improving Customer Satisfaction and Energy Efficiency
Improving Customer Satisfaction and Energy Efficiency CenterPoint expects to publish the 2017 Corporate Responsibility Report on the Investors section of our website in late March Carbon footprint lower than integrated utilities due to a lack of generation assets Natural Gas Distribution CIP In 2017
Slide 13: Business Segment: Natural Gas Distribution
Business Segment: Natural Gas Distribution Six state footprint with vibrant metropolitan areas of Houston and Minneapolis ~3.5 million customers in 2017 Customer growth 1% in 2016 ~1% in 2017 Earning near allowed returns; aggregate 9.6% allowed ROE in 2017 Capital recovery mechanisms that reduce reg
Slide 14: Natural Gas Distribution Capital Investment Outlook
Capital Recovery Method 2017A 2018E 2019E 2020E 2021E 2022E Annual Mechanisms 58% 65% 58% 66% 67% 67% Rate Cases 42% 35% 42% 34% 33% 33% (1) Includes AFUDC Note: Current as of February 22, 2018, as provided on our Q4 2017 earnings call $3.2 Billion 2018 – 2022 Capital Plan $523 $635 $612 $637 $664 $
Slide 15: Rate base projected to grow with capital investment
Capital rate base projected to grow primarily as a result of capital investment outlook (1) The average annual rate base is subject to change due to actual capital investment and deferred taxes, the time frame over which excess deferred taxes are returned to customers, and the actual rate base autho
Slide 16: Business Segment: Energy Services
Business Segment: Energy Services Energy Services contributed operating income of $46 million in 2017 compared to $41 million in 2016, excluding a mark-to-market gain of $79 million and loss of $21 million, respectively Operating income, excluding the mark-to-market gain, increased primarily as a re
Slide 17: Business Segment: Midstream Investments
Business Segment: Midstream Investments Reported equity earnings of $265 million or $0.38 per diluted share, excluding tax reform, in 2017, compared to $208 million or $0.28 per diluted share in 2016 $0.38 per diluted share in 2017 represents 27.7% of guidance basis earnings, excluding the impacts o
Slide 18: Midstream Investments: Enable's record-setting year
Business Segment: Midstream Investments Per Enable’s 4th quarter and full-year 2017 presentation dated February 20, 2018 (1) Full-year operational performance since Enable’s formation in 2013 (2) Per Drillinginfo as of February 5, 2018 Highest natural gas gathered and processed volumes Highest NGLs
Slide 19: Midstream Investments: Financial Statements Impact
Business Segment: Midstream Investments(1) Financial Statements Impact $297 million(2) cash distributions received in 2017 $0.38(3) per share impact to 2017 guidance basis EPS, excluding tax reform $0.42 - $0.50(4) per share impact to guidance basis EPS in 2018 CNP Ownership of Enable Midstream Comm
Slide 20: Appendix
Appendix
Slide 21: Tax Cuts and Jobs Act Impact
Tax Cuts and Jobs Act Impact (1) Excluding Transition and System Restoration bonds, see slides 24 – 25 Lower Effective Tax Rate The reduction in rates is expected to provide approximately a $0.10 increase in 2018 diluted EPS, primarily associated with our unregulated businesses Balance Sheet and Cre
Slide 22: Enable Midstream Partners, LP Ownership Structure
Enable Midstream Partners, LP Ownership Structure Note: As of December 31, 2017 Public Unitholders Transportation and Storage Gathering and Processing GP Interest 50% management interest 40% economic interest LP Interest 54.1% of common units 100% of Series A Preferred Units Enable GP, LLC Incentive
Slide 23: Regulatory Mechanisms
Regulatory Mechanisms Electric Transmission and Distribution Distribution Cost Recovery Factor (DCRF) – filed annually Transmission Cost of Service (TCOS) – eligible to file two times per year Natural Gas Distribution Gas Reliability Infrastructure Program (GRIP) for capital cost recovery in Texas F
Slide 24: Consolidated Adjusted Funds From Operations (FFO)
CenterPoint Energy Consolidated Adjusted Funds From Operations (FFO) This slide includes adjusted funds from operations (“FFO”) which is net cash provided by operating activities: Excluding (I) changes in other assets and liabilities, (II) other, net and (III) amounts related to transition and syste
Slide 25: Consolidated Ratio of Adjusted FFO/Total Debt
CenterPoint Energy Consolidated Ratio of Adjusted FFO/Total Debt Excluding Transition and System Restoration Bonds * The transition and system restoration bonds are serviced with dedicated revenue streams, and the bonds are non-recourse to CenterPoint Energy and CenterPoint Energy Houston Electric *
Slide 26: Reconciliation: Operating Income to Core Operating Income
Reconciliation: Operating Income to Core Operating Income on a Guidance (Non-GAAP) Basis
Slide 27: 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 28: 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
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