Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Q3 2015 Earnings Presentation
25 slides from Centerpoint Energy, Inc (holding Co)'s earnings presentation, Nov 5, 2015
Slide 1: Third Quarter 2015 Earnings Call
November 5, 2015 Third Quarter 2015 Earnings Call Continued strong customer growth and cost discipline Company updates full year guidance to $1.05 - $1.10 Reaffirms 4-6% annual EPS growth through 2018 Exhibit 99.3
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future events or performance or underlying assumptions (including future dividends) and other statements that are not historical facts. These statements are “forward
Slide 3: Earnings Call Highlights
Scott Prochazka – President and CEO Earnings Call Highlights Utility Operations Update Customer Growth Regulatory Update Expense Management Debt Management Midstream Investment Update
Slide 4: Third Quarter 2015 Performance Highlights
Third Quarter 2015 Performance Highlights Q3 GAAP EPS Q3 2015 vs Q3 2014 Drivers (EPS on a Guidance Basis) $0.30 $0.34 Q3 EPS on a Guidance Basis 3Q15 Utility Operations EPS on a Guidance Basis vs 3Q14 Baseline h Favorable Variance i Unfavorable Variance Note: Refer to slide 22 for reconciliation to
Slide 5: Midstream Investments: Enable Q3 Highlights
Midstream Investments Enable Q3 Highlights Announced a third quarter 2015 distribution of $0.318/unit Fifth consecutive quarterly increase since IPO With this increase, 2015 distribution growth has reached the low end of Enable’s 3% to 7% guidance Per day natural gas processed volumes increased quar
Slide 6: Earnings Call Highlights: Electric
Tracy Bridge – EVP & President, Electric Division Earnings Call Highlights Electric Results Regulatory Update Houston – A Diverse and Growing Economy Construction of a new permanent 345kV double circuit tower in between temporary bypasses constructed to safely reenergize circuits damaged by tornadoe
Slide 7: Electric Transmission and Distribution Operating Income Drivers
Electric Transmission and Distribution Operating Income Drivers: 3rd Quarter 2014 vs 3rd Quarter 2015 1 Houston Electric’s customer count increased from 2,284,202 as of September 30, 2014, to 2,337,806 as of September 30, 2015 2 Q3 2014 TDU core operating income represents total segment operating in
Slide 8: Electric Transmission and Distribution: 2015 Regulatory Update
Electric Transmission and Distribution: 2015 Regulatory Update DCRF – Distribution Cost Recovery Factor; TCOS – Transmission Cost of Service; EECRF – Energy Efficiency Cost Recovery Factor 1 Performance incentive approved and recognized in Q4 2014 was $16.2 million Mechanism Effective Date Annual Re
Slide 9: Houston – A Diverse and Growing Economy
Houston – A Diverse and Growing Economy GDP Forecast Houston – The Woodlands – Sugarland MSA GDP forecast ($ billions ‘09 constant dollars) Source: Perryman Group Source: Greater Houston Partnership Q4 2015 Pictures: jakewyman.com, theaspenskinny.com, snipview.com, ncaa.com, housuperbowl.com
Slide 10: Earnings Call Highlights: Gas Division
Joe McGoldrick – EVP & President, Gas Division Earnings Call Highlights Gas Operations Results Regulatory Update Energy Services Update 2015 Minnesota Beltline Replacement Project in downtown Minneapolis
Slide 11: Natural Gas Utilities Operating Income Drivers
Natural Gas Utilities Operating Income Drivers: 3rd Quarter 2014 vs 3rd Quarter 2015 1% YoY Customer Growth1 $ Millions 1 Natural Gas Utilities’ customer count increased from 3,324,422 on September 30, 2014, to 3,359,556 on September 30, 2015 2 O&M expense excludes certain costs with revenue offsets
Slide 12: Natural Gas Utilities: 2015 Regulatory Update
Natural Gas Utilities: 2015 Regulatory Update Jurisdiction Effective Date Annual Revenue Increase - $MM Comments Docket # Arkansas June 2015 $1.5 (Interim Rates) Act 310 filing pending approval 2; interim rates effective in June 2015 10-108-U South Texas July 2015 $4.0 Fourth annual GRIP filing; app
Slide 13: Natural Gas Utilities: 2015 Regulatory Update
Natural Gas Utilities: 2015 Regulatory Update RSP – Rate Stabilization Plan; RRA – Rate Regulation Adjustment; MPSC – Mississippi Public Service Commission; SGR – Supplemental Growth Rider; PBRC – Performance Based Rate Change; BDA – Billing Determinant Rate Adjustment 1 Interim rates begin the reco
Slide 14: Natural Gas Utilities: 2015 Regulatory Update
Natural Gas Utilities: 2015 Regulatory Update RSP – Rate Stabilization Plan; GSR – Gas Supply Rate; APSC – Arkansas Public Service Commission; MPUC – Minnesota Public Utilities Commission; CIP – Conservation Improvement Program 1 Arkansas performance incentive approved and recognized in 2014 was $0.
Slide 15: Energy Services Operating Income Drivers
Energy Services Operating Income Drivers: 3rd Quarter 2014 vs 3rd Quarter 2015 1 2 1 Operating income as reported in Q3 2014 was $6 million. Chart excludes mark-to-market gain of $13 million. 2 Operating income as reported in Q3 2015 was $7 million. Chart excludes mark-to-market gain of $5 million.
Slide 16: Earnings Call Highlights: CFO
Bill Rogers – EVP & CFO Earnings Call Highlights Impairment Discussion Quarterly Drivers Guidance Update Financing Activities
Slide 17: Non-Cash Impairment Charges Related to Midstream Investments
Non-Cash Impairment Charges Related to Midstream Investments Recorded impairments on equity investment in Enable Midstream totaling $862 million in the third quarter of 2015, inclusive of CenterPoint’s share, $612 million, of impairment charges recorded by Enable Midstream for goodwill and long-live
Slide 18: Q3 EPS Normalization
Q3 EPS Normalization GAAP to Guidance Basis to Baseline Note: Please refer to slide 22 for the full reconciliation table and slide 2 for information on non-GAAP measures
Slide 19: 2014 Q3 Baseline EPS to 2015 Q3 EPS on a Guidance Basis
2014 Q3 Baseline EPS to 2015 Q3 EPS on a Guidance Basis Note: Please refer to slide 22 for the full reconciliation table and slide 2 for information on non-GAAP measures
Slide 20: Financing Plan & Tax Rates
Financing Plan 2015 $200 million matured in June 2015 $69 million matured in October 2015 Net borrowing expected to increase ~$300 million 2016 $325 million maturity in May 2016 Anticipate incremental financing needs of ~$600 million; dependent on such factors as bonus depreciation, capital investme
Slide 21: Appendix
Appendix
Slide 22: Reconciliation: Net Income and Diluted EPS to Guidance Basis
Reconciliation: Net Income and diluted EPS to the Basis Used in Providing Annual Earnings Guidance Note: For information on non-GAAP measures, please refer to slide 2
Slide 23: 2014 EPS Reconciliation to 2015 Utility Operations Guidance
2014 EPS Reconciliation to 2015 Utility Operations Guidance Range of $0.71 to $0.75 per diluted share 2014 Fully Diluted EPS $ 1.42 On an adjusted guidance basis: ZENS-related mark to market gains (0.12) CES MTM gain (0.04) Pension Curtailment loss 0.01 2014 Consolidated EPS on a guidance basis $ 1.
Slide 24: Houston Electric Right of Way Revenues
Right of Way Revenues $4 million $29 million $2 million $27 million $21 million $14 million (YTD) Revenues attributable to allowing third-party use of transmission ROWs Third-party needs result in uncertain project/revenue timing 2015 ROW revenue range of $10 to $20 million expected Houston Electric
Slide 25: Reconciliation: Operating Income to Core Operating Income
Reconciliation: Operating Income to Core Operating Income on a Guidance Basis