Centerpoint Energy, Inc (holding Co) · NYSE:CNP

Centerpoint Energy, Inc (holding Co) — Investor Day (December 2020)

49 slides from Centerpoint Energy, Inc (holding Co)'s investor day presentation, Dec 7, 2020

  1. Slide 1: CenterPoint Energy Investor Day – December 7, 2020

    CenterPoint Energy Investor Day – December 2020 December 7, 2020 Investor Day Exhibit 99.1

  2. Slide 2: Forward-Looking Statements

    CenterPoint Energy Investor Day – December 2020 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

  3. Slide 3: Use of Non-GAAP Financial Measures

    CenterPoint Energy Investor Day – December 2020 Use of Non-GAAP Financial Measures In this presentation and the oral statements made in connection herewith, CenterPoint Energy presents guidance basis Utility earnings per share (“Utility EPS”) based on adjusted diluted earnings per share, which is no

  4. Slide 4: Dave Lesar, President and CEO – Introduction

    CenterPoint Energy Investor Day – December 2020 4 Dave Lesar President and CEO Introduction

  5. Slide 5: Takeaways from Q3 2020 Earnings Call

    CenterPoint Energy Investor Day – December 2020 TAKEAWAYS FROM Q3 2020 EARNINGS CALL Introduction 5 Notes: Refer to slide 2 for information on forward-looking statements and slide 3 for information on 2020 guidance basis Utility EPS assumptions and non-GAAP measures. (1) Refers to guidance basis Uti

  6. Slide 6: Meet the Team

    CenterPoint Energy Investor Day – December 2020 6 MEET THE TEAM Introduction Kristie Colvin SVP and Chief Accounting Officer Monica Karuturi SVP and General Counsel Jason Ryan SVP of Regulatory Services and Government Affairs Lynne Harkel-Rumford SVP and Chief Human Resources Officer Tom Webb Senior

  7. Slide 7: Investor Day Agenda

    CenterPoint Energy Investor Day – December 2020 INVESTOR DAY AGENDA Introduction Introduction Dave Lesar – President and Chief Executive Officer Brief Intermission New Model Jason Wells – EVP and Chief Financial Officer Core Utility Platforms: Electric & Natural Gas Kenny Mercado – SVP of Electric U

  8. Slide 8: Our Value Proposition

    CenterPoint Energy Investor Day – December 2020 OUR VALUE PROPOSITION Introduction Note: Refer to slide 2 for information on forward-looking statements and slide 3 for information on guidance basis Utility EPS assumptions and non-GAAP measures. (1) Refers to guidance basis Utility EPS annual growth

  9. Slide 9: Jason Wells, EVP and CFO – New Model

    CenterPoint Energy Investor Day – December 2020 9 Jason Wells EVP and Chief Financial Officer New Model

  10. Slide 10: New Model, New Plan

    CenterPoint Energy Investor Day – December 2020 NEW MODEL, NEW PLAN…. 1 4 3 2 Operational Excellence – Accelerate Customer Growth – Organic  $16B+ five-year capital investment plan  ~10% five-year rate base CAGR (1)  Increasing annual guidance basis Utility EPS growth to 6% - 8% (2)  1%-2% annua

  11. Slide 11: Kenny Mercado – Core Utility Platforms: Electric

    CenterPoint Energy Investor Day – December 2020 11 Kenny Mercado SVP of Electric Utility Core Utility Platforms – Electric

  12. Slide 12: Premium Jurisdictions with Growth Runway – Electric

    CenterPoint Energy Investor Day – December 2020 Value Proposition 12 PREMIUM JURISDICTIONS WITH GROWTH RUNWAY….  Robust capital investments serving:  Strong customer growth  Modern resiliency needs  Significant renewable developments  Constructive regulatory recovery mechanisms  Strong, consis

  13. Slide 13: Customer Growth Drives Robust Pipeline of Capital Expenditures

    CenterPoint Energy Investor Day – December 2020 13 10 STRAIGHT YEARS OF ANNUAL CUSTOMER GROWTH OF 2%+ (1)…. Note: Refer to slide 2 for information on forward-looking statements. (1) Refers to compound annual growth rate of Houston Electric’s metered customer counts (2) Houston Electric; from 2016 to

  14. Slide 14: Continued Improvement on Reliability and Resiliency

    CenterPoint Energy Investor Day – December 2020  Storm threat in the Gulf Coast:  8 major storms in 2020  Responded to all mutual assistance requests  Storm-resilient system:  Cable and pole inspection and replacement program  Condition-based replacement for substation breakers and transformer

  15. Slide 15: Commitment to Delivering Cleaner Energy

    CenterPoint Energy Investor Day – December 2020 15 COMMITMENT TO DELIVERING CLEANER ENERGY…. Texas:  Enabling 11 utility scale solar projects in greater Houston area by 2022  Anticipating more renewable projects to come online in 2023 and beyond  Driving significant expansion of existing transmis

  16. Slide 16: Long-Term Pipeline of Renewable Opportunities in Indiana

    CenterPoint Energy Investor Day – December 2020 16 LONG-TERM PIPELINE OF RENEWABLE OPPORTUNITIES… ….DELIVERS CLEANER, GREENER, MORE COST-EFFECTIVE ENERGY FOR OUR CUSTOMERS IN INDIANA. Coal 81% Natural Gas 13% Renewables 6% 80% Reduction in Coal generation by 2025 (2) 2020E Resource Mix Installed Cap

  17. Slide 17: Constructive Capital Recovery Mechanisms – Electric

    CenterPoint Energy Investor Day – December 2020 17 CONSTRUCTIVE CAPITAL RECOVERY MECHANISMS SUPPORT TIMELY RECOVERY OF INVESTMENTS…. $1.1 $0.7 $0.6 $0.6 $0.5 $0.7 $0.8 $0.6 $0.6 $0.8 $0.2 $0.2 $0.1 $0.4 $0.5 $0.1 $0.1 $0.2 $1.3 $2.0 $1.8 $2.0 $1.9 $1.4 2020E 2021E 2022E 2023E 2024E 2025E Transmissio

  18. Slide 18: Cost Discipline Is the Way We Do Business

    CenterPoint Energy Investor Day – December 2020 18 COST DISCIPLINE IS THE WAY WE DO BUSINESS….  Consistent 1st quartile O&M per Customer performance (2)  Indiana Electric has held O&M below 2012 spend since then  Expanding our ‘lean’ management program to achieve greater efficiencies in:  Vegeta

  19. Slide 19: Vegetation Management Analytics Technology

    CenterPoint Energy Investor Day – December 2020 Vegetation Management Analytics Technology What: Use satellite imagery and artificial intelligence to optimize vegetation management Why: Prioritize high-risk areas  Improve reliability and safety Maximize value CONTINUOUS IMPROVEMENT…. 19 ….DRIVES

  20. Slide 20: Scott Doyle – Core Utility Platforms: Natural Gas

    CenterPoint Energy Investor Day – December 2020 20 Scott Doyle EVP of Natural Gas Core Utility Platforms – Natural Gas

  21. Slide 21: Premium Jurisdictions with Growth Runway – Natural Gas

    CenterPoint Energy Investor Day – December 2020 Value Proposition 21 PREMIUM JURISDICTIONS WITH GROWTH RUNWAY….  Largest Gas Utility based on miles of main  Robust capital investments  Over 2% customer growth in Houston and Central TX Corridor (Austin, San Antonio); over 1% in other jurisdictions

  22. Slide 22: Commitment to System Safety and Reliability

    CenterPoint Energy Investor Day – December 2020 22 COMMITMENT TO SYSTEM SAFETY AND RELIABILITY…. Infrastructure Modernization  Belt line replacement in Minnesota  Cast iron replacement in Indiana and Ohio  Integrity Management Replacement Program in all service territories Metering Infrastructure

  23. Slide 23: Focused on Enabling Energy Transformation

    CenterPoint Energy Investor Day – December 2020 FOCUSED ON ENABLING ENERGY TRANSFORMATION TO…. 23 Clean Foundation  Natural Gas = Significant efficiency and cost advantage  Emissions reductions from our pipe replacements  First of its kind customer emissions reduction goal through:  Hydrogen  R

  24. Slide 24: Constructive Capital Recovery Mechanisms – Natural Gas

    CenterPoint Energy Investor Day – December 2020 $0.8 $0.7 $0.8 $0.7 $1.0 $0.1 $0.1 $0.2 $0.2 $0.2 $0.4 $0.4 $0.4 $0.4 $0.4 $0.4 $0.3 $1.2 $1.4 $1.3 $1.8 $1.5 $1.6 2020E 2021E 2022E 2023E 2024E 2025E Meters and Regulators Public Improvements & Other Growth / Customer Additions System Maintenance & Im

  25. Slide 25: Cost Discipline: O&M per Customer Reduction

    CenterPoint Energy Investor Day – December 2020 $166 $163 $151 $147 $144 $140 2020E 2021E 2022E 2023E 2024E 2025E 25 COST DISCIPLINE IS THE WAY WE DO BUSINESS…. HighlightsO&M per Customer (1) Note: Refer to slide 2 for information on forward-looking statements. (1) A composite of all jurisdictions i

  26. Slide 26: Continuous Improvement: Leak Survey Innovation

    CenterPoint Energy Investor Day – December 2020 26 CONTINUOUS IMPROVEMENT…. ….DRIVES MORE EFFICIENT CAPITAL PLANNING AND SYSTEM MAINTENANCE. Leak Survey Innovation  Modernized leak survey tool  Leads to more efficient resolution of identified leaks  Leads to more efficient capital replacements 

  27. Slide 27: Gregory Knight – Customer-centric Mindset

    CenterPoint Energy Investor Day – December 2020 27 Gregory Knight EVP of Customer Transformation and Business Services Customer-centric Mindset

  28. Slide 28: Customer Satisfaction Credentials

    CenterPoint Energy Investor Day – December 2020 28 CUSTOMER SATISFACTION CREDENTIALS…. 2020 Most Trusted Utility Designation 2020 Easiest Utilities to do Business With 2020 Best Utility TX TDSP for Brand Trust Product Experience Service Satisfaction in Customer Satisfaction with Residential Natural

  29. Slide 29: Continuous Improvement Delivers Efficient and Innovative Solutions

    CenterPoint Energy Investor Day – December 2020 Customer-centric Efficient Operations Innovative Cost Control • Customer Effort Score and Customer Satisfaction: part of incentive program • Texas Electric Outage Notification achieving outstanding 88% satisfaction & 90% call deflection • Unifying ERP

  30. Slide 30: Investments Made to Enable and Deliver More for Customers

    CenterPoint Energy Investor Day – December 2020 30 Note: Refer to slide 2 for information on forward-looking statements. (1) Based on 2005 level (2) Based on 8,105 responses, surveyed through 10/31/2020 (3) Combination of participated customers in TX, AR, OK, MN, MS, IN, and OH from 2015 - 2019 INVE

  31. Slide 31: Tom Webb, Senior Advisor – Winning Recipe

    CenterPoint Energy Investor Day – December 2020 31 Tom Webb Senior Advisor Winning Recipe

  32. Slide 32: Consistent, Premier Performance

    CenterPoint Energy Investor Day – December 2020 32 CONSISTENT, PREMIER PERFORMANCE…. OPERATING EXCELLENCE EARNINGS PER SHARE GROWTH (2) We sweat the details… ….so you don’t have to. Future CNP Peer Avg (3) Rate Base Growth 10% (1) 7% EPS Growth 6% - 8% (2) 5% Customer Growth ~2% Flat O&M Cost Down 1

  33. Slide 33: Culture of Continuous Improvement

    CenterPoint Energy Investor Day – December 2020 33 CULTURE OF CONTINUOUS IMPROVEMENT…. • Safety – Every day • Quality – The first time • Delivery – On time • Cost – See, eliminate waste • Morale – Proud to serve ACCELERATES O&M COST SAVINGS Good Business Decisions 2021 – 2025 (million) • Attrition $

  34. Slide 34: Jason Wells, EVP and CFO – Financial Plan

    CenterPoint Energy Investor Day – December 2020 34 Jason Wells EVP and Chief Financial Officer Financial Plan

  35. Slide 35: 2021–2025 Capital Expenditure Plan

    CenterPoint Energy Investor Day – December 2020 $1.3 $2.0 $1.8 $2.0 $1.9 $1.4 $1.2 $1.4 $1.3 $1.8 $1.5 $1.6 ~$2.5 ~$3.4 ~$3.1 ~$3.8 ~$3.3 ~$3.0 2020E 2021E 2022E 2023E 2024E 2025E Electric Gas 2021 – 2025 CAPITAL EXPENDITURE PLAN…. 35 $ in billions ….OPTIMIZED TO IMPROVE SERVICE, SAFETY, RELIABILITY

  36. Slide 36: 2020–2025 Rate Base Growth

    CenterPoint Energy Investor Day – December 2020 $7.1 $8.0 $7.8 $9.0 $9.9 $10.7 $8.8 $10.2 $11.2 $12.4 $13.9 $14.6 ~$15.9 ~$18.3 ~$19.0 ~$21.5 ~$23.8 ~$25.2 2020E 2021E 2022E 2023E 2024E 2025E Gas Electric 36 2020-2025 RATE BASE GROWTH…. ....DELIVERING INDUSTRY LEADING GROWTH. $ in billions Note: Ref

  37. Slide 37: Balanced 2021–2025 Capital Expenditure Plan

    CenterPoint Energy Investor Day – December 2020 Gas LDCs 45% Electric - Transmission 21% Electric - Distribution 21% Electric - Renewables 6% Electric - Other Gen & Other 7% 37 BALANCED 2021 - 2025 CAPITAL EXPENDITURE PLAN…. By Function Capital Recovery Mechanisms 76% Rate Case (1) 24% Recovery CapE

  38. Slide 38: 2021–2025 Financial Plan

    CenterPoint Energy Investor Day – December 2020 38 2021 – 2025 FINANCIAL PLAN…. Operating Company Debt Cash Flow Equity (No Block) Gas LDCs Sale (1) $16B+ Capital Expenditures Equity  DRIP: ~$25M/year  Small ATMs: ~$50M/year starting in 2022 Note: Refer to slide 2 for information on forward-lookin

  39. Slide 39: Sale of Two Natural Gas LDCs

    CenterPoint Energy Investor Day – December 2020 39 SALE OF TWO NATURAL GAS LDCs…. Oklahoma Gas Arkansas Gas Note: Refer to slide 2 for information on forward-looking statements. Customer data as of September 30, 2020; Operational data as of December 31, 2019 ….SUPPORTS EFFICIENT CAPITAL ALLOCATION.

  40. Slide 40: Focus on Strong Investment Grade Ratings and Metrics

    CenterPoint Energy Investor Day – December 2020 Other VUHI intercompany debt Use of Asset Sale Proceeds Other Midstream (2) VUHI intercompany debt Use of Asset Sale Proceeds Midstream (2) Adjusted Total Parent Debt VUHI intercompany debt Use of Asset Sale Proceeds Adjusted Total Parent Debt External

  41. Slide 41: Rate Base Growth Driving 6%–8% Utility EPS Growth

    CenterPoint Energy Investor Day – December 2020 2020-2025 RATE BASE GROWTH DRIVING 6% - 8% UTILITY EPS GROWTH (1)…. ~10% ~1.5% ~0.5% ~0.5% ~0.5% 6% - 8% Rate Base Growth Additional shares Interest Expense from Parent-level Debt Regulatory Lag Other Long-term EPS Growth ….WITH STRUCTURAL HEADWINDS TH

  42. Slide 42: 2021 Utility Earnings Guidance

    CenterPoint Energy Investor Day – December 2020 $0.05 $0.07 $0.02 FY 2020 Guidance Basis Utility EPS One-time items Increase in share count Net growth and rate relief O&M reductions ENBL Preferred units to Midstream FY 2021 Guidance Basis Utility EPS 42 2021 UTILITY EARNINGS GUIDANCE…. ….ACHIEVABLE

  43. Slide 43: Old Model vs New Model: New CenterPoint Energy

    CenterPoint Energy Investor Day – December 2020 OLD MODEL (1) NEW MODEL (2) 43 NEW CENTERPOINT ENERGY…. Capital Investment ~$13B Rate Base Growth ~7.5% Guidance Basis Utility EPS Growth 5% - 7% O&M Annual Growth Up 1% to 2% Gas LDC Jurisdictions 8 Capital Investment $16B+ Rate Base Growth ~10% Guida

  44. Slide 44: Dave Lesar, President and CEO – Key Takeaways

    CenterPoint Energy Investor Day – December 2020 44 Dave Lesar President and CEO Key Takeaways

  45. Slide 45: Our Value Proposition

    CenterPoint Energy Investor Day – December 2020 OUR VALUE PROPOSITION Key Takeaways Note: Refer to slide 2 for information on forward-looking statements and slide 3 for information on guidance basis Utility EPS assumptions and non-GAAP measures. (1) Refers to guidance basis Utility EPS annual growth

  46. Slide 46: Q&A Instructions

    CenterPoint Energy Investor Day – December 2020 AQ Please mute your webcast and listen to the audio from your phone if you are participating in Q&A

  47. Slide 47: We Deliver Energy

    CenterPoint Energy Investor Day – December 2020 We Deliver Energy Reliability Service Value Innovation

  48. Slide 48: Appendix

    CenterPoint Energy Investor Day – December 2020 APPENDIX

  49. Slide 49: Adjusted Total Parent Debt as a Percentage of Adjusted Consolidated Debt

    CenterPoint Energy Investor Day – December 2020 CENTERPOINT ENERGY ADJUSTED TOTAL PARENT DEBT AS A PERCENTAGE OF ADJUSTED CONSOLIDATED DEBT APPENDIX Note: Refer to slide 3 for information on non-GAAP measures. * The transition and system restoration bonds are serviced with dedicated revenue streams,

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