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CenterPoint Energy Reports Q3 2020 Earnings of $0.13 Per Diluted Share; $0.34 Diluted EPS on a Guidance Basis, With $0.29 Diluted EPS From Utility Operations and $0.05 Diluted EPS From Midstream Investments

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·19 min read
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  • Utilities led company with strong third quarter results

  • Raising 2020 Utility EPS guidance range to $1.12 - $1.20 and reiterating 5% - 7% Utility EPS guidance basis growth rate target

  • Third quarter 2020 GAAP results include after-tax non-cash impairment charges of $92 million or $0.15 per diluted share for the company's share of impairment charges recorded by Enable

CenterPoint Energy, Inc. (NYSE: CNP) today reported income available to common shareholders of $69 million, or $0.13 per diluted share, for the third quarter of 2020, compared to income available to common shareholders of $241 million, or $0.47 per diluted share, for the third quarter of 2019. The third quarter 2020 results included after-tax non-cash impairment charges of $92 million or $0.15 per diluted share for the companys share of impairment charges recorded by Enable Midstream Partners, LP ("Enable").

On a guidance basis, third quarter 2020 earnings were $0.34 per diluted share, with $0.29 per diluted share from utility operations, and $0.05 per diluted share from midstream investments, excluding non-cash impairment charges. Third quarter 2019 earnings, on a guidance basis, were $0.47 per diluted share, with $0.39 per diluted share from utility operations and $0.08 per diluted share from midstream investments. See "Reconciliation of Consolidated income (loss) available to common shareholders and diluted earnings (loss) per share (GAAP) to guidance basis income and guidance basis diluted earnings per share (Non-GAAP)" and "Earnings Outlook and Non-GAAP Considerations" below.

"Our strong third quarter results confirm our commitment to delivering value for our customers and shareholders," said Dave Lesar, President and Chief Executive Officer of CenterPoint Energy. "Given the strength of our results, we are raising our 2020 guidance basis Utility EPS range to $1.12 - $1.20."

Lesar added, "We also recently concluded the work of the Business Review and Evaluation Committee of the Board. We are eager to share our strategy and invite investors to join management for a virtual Investor Day on December 7, 2020."

"During our Investor Day, we will highlight our updated long-term annual rate base growth projection of approximately 10%. This rate base growth is central to our strategy to deliver consistent year-over-year earnings growth to investors and improve service to our customers. The projected additional capital expenditures driving this 10% annual rate base growth not only put us in a position to reiterate our 5% - 7% five-year guidance basis Utility EPS annual growth target, but gives us confidence in being able to deliver results at the top end of that range. I remain greatly energized about CenterPoint Energys future and will continue to work tirelessly to drive maximum value for all of our stakeholders."

Earnings Outlook and Non-GAAP Considerations

To provide greater transparency on utility earnings, 2020 guidance will be presented in two components, a guidance basis Utility EPS range and a Midstream Investments EPS expected range.

In addition to presenting its financial results in accordance with GAAP, including presentation of income (loss) available to common shareholders and diluted earnings (loss) per share, CenterPoint Energy provides guidance based on guidance basis income and guidance basis diluted earnings per share, which are non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a companys historical or future financial performance that excludes or includes amounts that are not normally excluded or included in the most directly comparable GAAP financial measure.

Management evaluates CenterPoint Energys financial performance in part based on guidance basis earnings per share. Management believes that presenting these non-GAAP financial measures enhances an investors understanding of CenterPoint Energys overall financial performance, including the impact of its Enable investment, by providing them with an additional meaningful and relevant comparison of current and anticipated future results across periods. The adjustments made in these non-GAAP financial measures exclude items that Management believes do not most accurately reflect the companys fundamental business performance. These excluded items are reflected in the reconciliation tables of this news release, where applicable. CenterPoint Energys guidance basis income and guidance basis diluted earnings per share non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, income available to common shareholders and diluted earnings per share, which respectively are the most directly comparable GAAP financial measures. These non-GAAP financial measures also may be different than non-GAAP financial measures used by other companies.

(1) Utility EPS Guidance Range

  • The Utility EPS guidance range includes net income from Houston Electric, Indiana Electric and Natural Gas Distribution segments, as well as after tax Corporate and Other operating income.

  • The 2020 Utility EPS guidance range reflects dilution and earnings as if the Series C preferred stock were issued as common stock.

  • The Utility EPS guidance excludes:

    • Earnings or losses from the change in value of ZENS and related securities

    • Certain expenses associated with merger integration and Business Review and Evaluation Committee activities

    • Severance costs

    • Results related to Infrastructure Services and Energy Services, including costs and impairment resulting from the sale of those businesses

    • Midstream Investments and allocation of associated corporate overhead

In providing this guidance, CenterPoint Energy does not consider the items noted above and other potential impacts such as changes in accounting standards, impairments or other unusual items, which could have a material impact on GAAP reported results for the applicable guidance period. The 2020 Utility EPS guidance range also considers operations performance to date and assumptions for certain significant variables that may impact earnings, such as customer growth (above 2% for electric operations and 1% for natural gas distribution) and usage including normal weather, throughput, recovery of capital invested, effective tax rates, financing activities and related interest rates, regulatory and judicial proceedings, and anticipated cost savings as a result of the merger. In addition, the Utility EPS guidance range incorporates a full-year COVID-19 scenario range of $0.10 - $0.15 which assumes reduced demand levels and miscellaneous revenues with the second quarter as the peak and reflects anticipated deferral and recovery of certain incremental expenses, including bad debt. The COVID-19 scenario range also assumes a gradual re-opening of the economy in CenterPoint Energy's service territories, with anticipated reduced demand and lower miscellaneous revenues over the remainder of 2020. The 2020 Utility EPS guidance range also assumes an allocation of corporate overhead based upon its relative earnings contribution. Corporate overhead consists of interest expense, preferred stock dividend requirements, income on Enable preferred units and other items directly attributable to the parent along with the associated income taxes. CenterPoint Energy is unable to present a quantitative reconciliation of forward-looking guidance basis diluted earnings per share because changes in the value of ZENS and related securities, future impairments, and other unusual items are not estimable and are difficult to predict due to various factors outside of managements control.

(2) Midstream Investments EPS Expected Range

The 2020 Midstream Investments EPS expected range is $0.15 - $0.18. In providing this EPS expected range for Midstream Investments, CenterPoint Energy assumes a 53.7 percent ownership of Enable's common units and includes the amortization of its basis differential in Enable and assumes an allocation of its corporate overhead based upon Midstream Investments relative earnings contribution. The Midstream Investments EPS expected range reflects dilution and earnings as if CenterPoint Energy's Series C preferred stock were issued as common stock. The Midstream Investments EPS expected range takes into account such factors as Enables most recent public outlook for 2020 dated November 4, 2020, and effective tax rates. In providing this 2020 guidance, CenterPoint Energy uses a non-GAAP measure of guidance basis diluted earnings per share that does not consider other potential impacts such as changes in accounting standards, impairments or Enables unusual items, which could have a material impact on GAAP reported results for the applicable guidance period. CenterPoint Energy is unable to present a quantitative reconciliation of forward looking guidance basis diluted earnings per share because changes in Enables outlook, future impairments related to Midstream Investments or Enables unusual items are not estimable and are difficult to predict due to various factors outside of CenterPoint Energy managements control.

Reconciliation of Consolidated income (loss) available to common shareholders and diluted earnings (loss) per share (GAAP) to guidance basis income and guidance basis diluted earnings per share (Non-GAAP)

 

Quarter Ended

September 30, 2020

 

 

Utility Operations

 

Midstream
Investments

 

Corporate and
Other (6)

 

CES (1) & CIS (2)

(Disc. Operations)

 

Consolidated

 

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

Consolidated income (loss) available to common shareholders and diluted EPS

 

$

193

 

$

0.35

 

 

$

(62)

 

$

(0.11)

 

 

$

(56)

 

$

(0.10)

 

 

$

(6)

 

$

(0.01)

 

 

$

69

 

$

0.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ZENS-related mark-to-market (gains) losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable securities (net of taxes of $18) (4)(5)

 

 

 

 

 

 

 

(65)

 

(0.12)

 

 

 

 

 

(65)

 

(0.12)

 

Indexed debt securities (net of taxes of $18) (4)

 

 

 

 

 

 

 

66

 

0.12

 

 

 

 

 

66

 

0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impacts associated with the Vectren merger (net of taxes of $0, $1) (4)

 

2

 

 

 

 

 

 

2

 

0.01

 

 

 

 

 

4

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance costs (net of taxes of $1) (4)

 

4

 

0.01

 

 

 

 

 

 

 

 

 

 

 

4

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impacts associated with the sales of CES (1) and CIS (2) (net of taxes of $0) (4)

 

 

 

 

 

 

 

 

 

 

7

 

0.01

 

 

7

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impacts associated with Series C preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock dividend requirement and amortization of beneficial conversion feature

 

 

 

 

 

 

 

23

 

0.04

 

 

 

 

 

23

 

0.04

 

Impact of increased share count on EPS if issued as common stock

 

 

(0.03)

 

 

 

0.01

 

 

 

0.01

 

 

 

 

 

 

(0.01)

 

Total Series C preferred stock impacts

 

 

(0.03)

 

 

 

0.01

 

 

23

 

0.05

 

 

 

 

 

23

 

0.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on impairment (net of taxes of $29) (4)

 

 

 

 

92

 

0.15

 

 

 

 

 

 

 

 

92

 

0.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Other Allocation

 

(26)

 

(0.04)

 

 

(3)

 

 

 

30

 

0.04

 

 

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated on a guidance basis

 

$

173

 

$

0.29

 

 

$

27

 

$

0.05

 

 

$

 

$

 

 

$

 

$

 

 

$

200

 

$

0.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Energy Services segment

(2) Infrastructure Services segment

(3) Quarterly diluted EPS on both a GAAP and guidance basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS

(4) Taxes are computed based on the impact removing such item would have on tax expense

(5) Comprised of common stock of AT&T Inc. and Charter Communications, Inc.

(6) Corporate and Other, plus income allocated to preferred shareholders

Quarter Ended

September 30, 2019

 

 

Utility Operations

 

Midstream
Investments

 

Corporate and
Other (6)

 

CES (1) & CIS (2)

(Disc. Operations)

 

Consolidated

 

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

 

Dollars
in
millions

Diluted
EPS (3)

Consolidated income (loss) available to common shareholders and diluted EPS

 

$

225

 

$

0.44

 

 

$

50

 

$

0.10

 

 

$

(53

$

(0.10))

 

 

$

19

 

$

0.03

 

 

$

241

 

$

0.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Timing effects impacting CES (1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mark-to-market (gains) losses (net of taxes of $1) (4)

 

 

 

 

 

 

 

 

 

 

1

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ZENS-related mark-to-market (gains) losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable securities (net of taxes of $12) (4)(5)

 

 

 

 

 

 

 

(47

(0.09

 

 

 

 

(47

(0.09

Indexed debt securities (net of taxes of $12) (4)

 

 

 

 

 

 

 

50

 

0.10

 

 

 

 

 

50

 

0.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impacts associated with the Vectren merger (net of taxes of $2, $7, $1) (4)

 

3

 

0.01

 

 

 

 

 

13

 

0.03

 

 

4

 

0.01

 

 

20

 

0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Other Allocation

 

(34

(0.06

 

(8

(0.02

 

37

 

0.06

 

 

5

 

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exclusion of Discontinued Operations (7)

 

 

 

 

 

 

 

 

 

 

(29

(0.06

 

(29

(0.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated on a guidance basis

 

$

194

 

$

0.39

 

 

$

42

 

$

0.08

 

 

$

 

$

 

 

$

 

$

 

 

$

236

 

$

0.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Energy Services segment

(2) Infrastructure Services segment

(3) Quarterly diluted EPS on both a GAAP and guidance basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS

(4) Taxes are computed based on the impact removing such item would have on tax expense

(5) Comprised of common stock of AT&T Inc. and Charter Communications, Inc.

(6) Corporate and Other, plus income allocated to preferred shareholders

(7) Results related to discontinued operations are excluded from the company's guidance basis results

Filing of Form 10-Q for CenterPoint Energy, Inc.

Today, CenterPoint Energy, Inc. filed with the Securities and Exchange Commission (SEC) its Quarterly Report on Form 10-Q for the quarter ended September 30, 2020. A copy of that report is available on the companys website, under the Investors section. Investors and others should note that we may announce material information using SEC filings, press releases, public conference calls, webcasts, and the Investor Relations page of our website. In the future, we will continue to use these channels to distribute material information about the company and to communicate important information about the company, key personnel, corporate initiatives, regulatory updates and other matters. Information that we post on our website could be deemed material; therefore we encourage investors, the media, our customers, business partners and others interested in our company to review the information we post on our website.

Webcast of Earnings Conference Call

CenterPoint Energys management will host an earnings conference call on Thursday, November 5, 2020, at 7:00 a.m. Central time/8:00 a.m. Eastern time. Interested parties may listen to a live audio broadcast of the conference call on the companys website under the Investors section. A replay of the call can be accessed approximately two hours after the completion of the call and will be archived on the website for at least one year.

About CenterPoint Energy, Inc.

As the only investor owned electric and gas utility based in Texas, CenterPoint Energy, Inc. (NYSE: CNP) is an energy delivery company with electric transmission and distribution, power generation and natural gas distribution operations that serve more than 7 million metered customers in Arkansas, Indiana, Louisiana, Minnesota, Mississippi, Ohio, Oklahoma and Texas. As of September 30, 2020, the company owned approximately $33 billion in assets and also owned 53.7 percent of the common units representing limited partner interests in Enable Midstream Partners, LP, a publicly traded master limited partnership that owns, operates and develops strategically located natural gas and crude oil infrastructure assets. With approximately 9,600 employees, CenterPoint Energy and its predecessor companies have been in business for more than 150 years. For more information, visit CenterPointEnergy.com .

Forward-looking Statements

This news release includes, and the earnings conference call will include, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "target," "will" or other similar words are intended to identify forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual events and results may differ materially from those expressed or implied by these forward-looking statements. Any statements in this news release or on the earnings conference call regarding capital investments, rate base growth and our ability to achieve it, future earnings and guidance, including long-term growth rate, and future financial performance and results of operations, including, but not limited to the impact of COVID-19, including with respect to regulatory actions and the COVID-19 scenario range discussed in this news release, the Business Review and Evaluation Committees review process and outcomes, value creation, opportunities and expectations and any other statements that are not historical facts are forward-looking statements. Each forward-looking statement contained in this news release or discussed on the earnings conference call speaks only as of the date of this release or the earnings conference call.

Important factors that could cause actual results to differ materially from those indicated by the provided forward-looking information include, but are not limited to, risks and uncertainties relating to: (1) the performance of Enable, the amount of cash distributions CenterPoint Energy receives from Enable, and the value of CenterPoint Energys interest in Enable; (2) CenterPoint Energy's expected benefits of the merger with Vectren Corporation (Vectren) and integration, including the ability to successfully integrate the Vectren businesses and to realize anticipated benefits and commercial opportunities; (3) financial market and general economic conditions, including access to debt and equity capital and the effect on sales, prices and costs; (4) industrial, commercial and residential growth in CenterPoint Energys service territories and changes in market demand; (5) actions by credit rating agencies, including any potential downgrades to credit ratings; (6) the timing and impact of future regulatory and legal proceedings; (7) legislative decisions, including tax and developments related to the environment such as global climate change, air emissions, carbon, waste water discharges and the handling of coal combustion residuals, among others, and CenterPoint Energys carbon reduction targets; (8) the impact of the COVID-19 pandemic; (9) the recording of impairment charges, including any impairments related to CenterPoint Energys investment in Enable; (10) weather variations and CenterPoint Energys ability to mitigate weather impacts; (11) changes in business plans; (12) CenterPoint Energy's ability to fund and invest planned capital, including timely and appropriate rate actions that allow recovery of costs and a reasonable return on investment; (13) CenterPoint Energys or Enables potential business strategies and strategic initiatives, including the recommendations and outcomes of the Business Review and Evaluation Committee, restructurings, joint ventures and acquisitions or dispositions of assets or businesses, which may not be completed or result in the benefits anticipated by CenterPoint Energy or Enable; (14) CenterPoint Energys ability to execute operations and maintenance management initiatives; and (15) other factors discussed in CenterPoint Energys Annual Report on Form 10-K for the fiscal year ended December 31, 2019, CenterPoint Energys Quarterly Report on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020, including in the "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" sections of such reports, and other reports CenterPoint Energy or its subsidiaries may file from time to time with the Securities and Exchange Commission.

CenterPoint Energy, Inc. and Subsidiaries

Condensed Statements of Consolidated Income

(Millions of Dollars)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2020

 

2019

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

 

Utility revenues

 

$

1,538

 

 

$

1,548

 

 

$

5,087

 

 

$

5,284

 

Non-utility revenues

 

84

 

 

110

 

 

277

 

 

261

 

Total

 

1,622

 

 

1,658

 

 

5,364

 

 

5,545

 

Expenses:

 

 

 

 

 

 

 

 

Utility natural gas, fuel and purchased power

 

170

 

 

171

 

 

981

 

 

1,228

 

Non-utility cost of revenues, including natural gas

 

63

 

 

80

 

 

196

 

 

188

 

Operation and maintenance

 

659

 

 

621

 

 

1,976

 

 

2,042

 

Depreciation and amortization

 

306

 

 

316

 

 

885

 

 

938

 

Taxes other than income taxes

 

122

 

 

113

 

 

387

 

 

352

 

Goodwill Impairment

 

 

 

 

 

185

 

 

 

Total

 

1,320

 

 

1,301

 

 

4,610

 

 

4,748

 

Operating Income

 

302

 

 

357

 

 

754

 

 

797

 

Other Income (Expense):

 

 

 

 

 

 

 

 

Gain on marketable securities

 

83

 

 

59

 

 

14

 

 

206

 

Loss on indexed debt securities

 

(84

)

 

(62

)

 

(25

)

 

(216

)

Interest expense and other finance charges

 

(121

)

 

(134

)

 

(388

)

 

(389

)

Interest expense on Securitization Bonds

 

(7

)

 

(9

)

 

(22

)

 

(31

)

Equity in earnings (loss) of unconsolidated affiliates, net

 

(67

)

 

77

 

 

(1,499

)

 

213

 

Interest income

 

1

 

 

3

 

 

2

 

 

16

 

Interest income from Securitization Bonds

 

 

 

1

 

 

1

 

 

4

 

Other income, net

 

10

 

 

5

 

 

44

 

 

20

 

Total

 

(185

)

 

(60

)

 

(1,873

)

 

(177

)

Income (Loss) from Continuing Operations Before Income Taxes

 

117

 

 

297

 

 

(1,119

)

 

620

 

Income tax expense (benefit)

 

(10

)

 

46

 

 

(328

)

 

75

 

Income (Loss) from Continuing Operations

 

127

 

 

251

 

 

(791

)

 

545

 

Income (Loss) from Discontinued Operations (net of tax expense of $-0-, $16, $21 and $38, respectively)

 

(6

)

 

19

 

 

(182

)

 

89

 

Net Income (Loss)

 

121

 

 

270

 

 

(973

)

 

634

 

Income allocated to preferred shareholders

 

52

 

 

29

 

 

127

 

 

88

 

Income (Loss) Available to Common Shareholders

 

$

69

 

 

$

241

 

 

$

(1,100

)

 

$

546

 

Reference is made to the Combined Notes to Unaudited Condensed Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

CenterPoint Energy, Inc. and Subsidiaries

Selected Data From Statements of Consolidated Income

(Millions of Dollars, Except Share and Per Share Amounts)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share - continuing operations

 

$

0.14

 

 

$

0.44

 

 

$

(1.75

)

 

$

0.91

 

Basic earnings (loss) per common share - discontinued operations

 

(0.01

)

 

0.04

 

 

(0.35

)

 

0.18

 

Basic Earnings (loss) Per Common Share

 

$

0.13

 

 

$

0.48

 

 

$

(2.10

)

 

$

1.09

 

Diluted earnings (loss) per common share - continuing operations

 

$

0.14

 

 

$

0.44

 

 

$

(1.75

)

 

$

0.91

 

Diluted earnings (loss) per common share - discontinued operations

 

(0.01

)

 

0.03

 

 

(0.35

)

 

0.17

 

Diluted Earnings Per Common Share

 

$

0.13

 

 

$

0.47

 

 

$

(2.10

)

 

$

1.08

 

 

 

 

 

 

 

 

 

 

Dividends Declared per Common Share

 

$

0.1500

 

 

$

0.2875

 

 

$

0.5900

 

 

$

0.5750

 

Dividends Paid per Common Share

 

$

0.1500

 

 

$

0.2875

 

 

$

0.5900

 

 

$

0.8625

 

Weighted Average Common Shares Outstanding (in millions):

 

 

 

 

 

 

 

 

- Basic

 

545

 

 

502

 

 

525

 

 

502

 

- Diluted

 

548

 

 

505

 

 

525

 

 

505

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) by Segment

 

 

 

 

 

 

 

 

Houston Electric T&D

 

$

157

 

 

$

185

 

 

$

281

 

 

$

315

 

Indiana Electric Integrated

 

31

 

 

34

 

 

(121

)

 

41

 

Natural Gas Distribution

 

5

 

 

6

 

 

242

 

 

149

 

Total Utility Operations

 

193

 

 

225

 

 

402

 

 

505

 

Midstream Investments

 

(62

)

 

50

 

 

(1,165

)

 

124

 

Corporate and Other

 

(4

)

 

(24

)

 

(28

)

 

(84

)

Income (Loss) from Continuing Operations

 

127

 

 

251

 

 

(791

)

 

545

 

Income (loss) from Discontinued Operations, net of tax

 

(6

)

 

19

 

 

(182

)

 

89

 

Net Income (Loss)

 

$

121

 

 

$

270

 

 

$

(973

)

 

$

634

 

 

 

 

 

 

 

 

 

 

Reference is made to the Combined Notes to Unaudited Condensed Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

CenterPoint Energy, Inc. and Subsidiaries

Results of Operations by Segment

(Millions of Dollars, Except Throughput and Customer Data)

(Unaudited)

 

 

 

 

 

 

 

 

 

Houston Electric T&D

 

 

Three Months Ended September 30,

 

% Diff

 

Nine Months Ended September 30,

 

% Diff

 

 

2020

 

2019

 

Fav/Unfav

 

2020

 

2019

 

Fav/Unfav

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

828

 

 

$

859

 

 

(4

)%

 

$

2,186

 

 

$

2,313

 

 

(5

)%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operation and maintenance

 

381

 

 

359

 

 

(6

)%

 

1,104

 

 

1,086

 

 

(2

)%

Depreciation and amortization

 

151

 

 

168

 

 

10

%

 

420

 

 

519

 

 

19

%

Taxes other than income taxes

 

64

 

 

63

 

 

(2

)%

 

192

 

 

186

 

 

(3

)%

Total expenses

 

596

 

 

590

 

 

(1

)%

 

1,716

 

 

1,791

 

 

4

%

Operating Income

 

232

 

 

269

 

 

(14

)%

 

470

 

 

522

 

 

(10

)%

Other Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense and other finance charges

 

(50

)

 

(50

)

 

 

 

(149

)

 

(154

)

 

3

%

Interest income

 

1

 

 

9

 

 

(89

)%

 

3

 

 

22

 

 

(86

)%

Other income (expense), net

 

 

 

(2

)

 

 

 

4

 

 

(5

)

 

180

%

Income From Continuing Operations Before Income Taxes

 

183

 

 

226

 

 

(19

)%

 

328

 

 

385

 

 

(15

)%

Income tax expense

 

26

 

 

41

 

 

37

%

 

47

 

 

70

 

 

33

%

Net Income

 

$

157

$

185

(15

)%

$

281

$

315

(11

)%

Actual GWH Delivered

Residential

11,237

11,224

25,028

24,392

3

%

Total

28,031

28,379

(1

)%

71,293

71,417

Weather (percentage of 10-year average for service area):

Cooling degree days

106

%

110

%

(4

)%

109

%

106

%

3

%

Heating degree days

%

%

%

68

%

93

%

(25

)%

Number of metered customers - end of period:

Residential

2,291,038

2,232,740

3

%

2,291,038

2,232,740

3

%

Total

2,586,093

2,523,450

2

%

2,586,093

2,523,450

2

%

Reference is made to the Combined Notes to Unaudited Condensed Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

CenterPoint Energy, Inc. and Subsidiaries

Results of Operations by Segment

(Millions of Dollars, Except Throughput and Customer Data)

(Unaudited)

Indiana Electric Integrated

Three Months Ended September 30,

% Diff

Nine Months Ended September 30,

% Diff

2020

2019

Fav / Unfav

2020

2019 (1)

Fav / Unfav

Revenues

$

157

$

165

(5)

%

$

414

$

388

7

%

Utility natural gas, fuel and purchased power

41

46

11

%

108

112

4

%

Revenues less Utility natural gas, fuel and purchased power

116

119

(3)

%

306

276

11

%

Expenses:

Operation and maintenance

46

42

(10)

%

128

136

6

%

Depreciation and amortization

26

25

(4)

%

77

66

(17)

%

Taxes other than income taxes

4

4

12

10

(20)

%

Goodwill impairment

185

Total expenses

76

71

(7)

%

402

212

(90)

%

Operating Income (Loss)

40

48

(17)

%

(96)

64

(250)

%

Other Income (Expense)

Interest expense and other finance charges

(5)

(6)

17

%

(16)

(16)

Other income, net

3

1

200

%

6

3

100

%

Income (Loss) From Continuing Operations Before Income Taxes

38

43

(12)

%

(106)

51

(308)

%

Income tax expense

7

9

22

%

15

10

(50)

%

Net Income (Loss)

$

31

$

34

(9)

%

$

(121)

$

41

(395)

%

Actual GWH Delivered

Residential

438

457

(4)

%

1,085

978

11

%

Total

1,421

1,555

(9)

%

3,630

3,568

2

%

Weather (percentage of 10-year average for service area):

Cooling degree days

104

%

113

%

(9)

%

104

%

114

%

(10)

%

Heating degree days

99

%

99

%

%

93

%

95

%

(2)

%

Number of metered customers - end of period:

Residential

129,817

128,381

1

%

129,817

128,381

1

%

Total

148,925

147,337

1

%

148,925

147,337

1

%

(1) Represents February 1, 2019 through September 30, 2019 results only due to the Merger.

Reference is made to the Combined Notes to Unaudited Condensed Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

CenterPoint Energy, Inc. and Subsidiaries

Results of Operations by Segment

(Millions of Dollars, Except Throughput and Customer Data)

(Unaudited)

Natural Gas Distribution

Three Months Ended September 30,

% Diff

Nine Months Ended September 30,

% Diff

2020

2019

Fav/Unfav

2020

2019 (1)

Fav/Unfav

Revenues

$

560

$

541

4

%

$

2,519

$

2,629

(4

)%

Cost of revenues (2)

131

136

4

%

888

1,145

22

%

Revenues less Cost of revenues

429

405

6

%

1,631

1,484

10

%

Expenses:

Operation and maintenance

239

226

(6

)%

738

780

5

%

Depreciation and amortization

115

108

(6

)%

339

310

(9

)%

Taxes other than income taxes

52

43

(21

)%

175

149

(17

)%

Total expenses

406

377

(8

)%

1,252

1,239

(1

)%

Operating Income

23

28

(18

)%

379

245

55

%

Other Income (Expense)

Interest expense and other finance charges

(29

)

(24

)

(21

)%

(90

)

(71

)

(27

)%

Interest income

2

5

(60

)%

5

6

(17

)%

Other expense, net

(5

)

(2

)

(6

)

67

%

Income (Loss) From Continuing Operations Before Income Taxes

(4

)

4

(200

)%

292

174

68

%

Income tax expense (benefit)

(9

)

(2

)

350

%

50

25

(100

)%

Net Income

$

5

$

6

(17

)%

$

242

$

149

62

%

Throughput data in BCF

Residential

18

16

13

%

157

160

(2

)%

Commercial and industrial

84

88

(5

)%

317

326

(3

)%

Total Throughput

102

104

(2

)%

474

486

(2

)%

Weather (percentage of 10-year average for service area):

Heating degree days

100

%

18

%

82

%

90

%

100

%

(10

)%

Number of customers - end of period:

Residential

4,295,169

4,194,232

2

%

4,295,169

4,194,232

2

%

Commercial and industrial

346,641

344,858

1

%

346,641

344,858

1

%

Total

4,641,810

4,539,090

2

%

4,641,810

4,539,090

2

%

(1) Includes acquired natural gas operations February 1, 2019 through September 30, 2019 results only due to the Merger.

(2) Includes Utility natural gas, fuel and purchased power and Non-utility cost of revenues, including natural gas.

Reference is made to the Combined Notes to Unaudited Condensed Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

CenterPoint Energy, Inc. and Subsidiaries

Results of Operations by Segment

(Millions of Dollars, Except Throughput and Customer Data)

(Unaudited)

Midstream Investments

Three Months Ended September 30,

% Diff

Nine Months Ended September 30,

% Diff

2020

2019

Fav/Unfav

2020

2019

Fav/Unfav

Non-utility revenues

$

$

$

$

Taxes other than income taxes

(1

)

Total expenses

(1

)

Operating Income

1

Other Income (Expense)

Interest expense and other finance charges

(14

)

(13

)

(8

)%

(41

)

(39

)

(5

)%

Equity in earnings (loss) from Enable, net

(67

)

77

(187

)%

(1,499

)

213

(804

)%

Interest income

2

1

7

(86

)%

Income (Loss) From Continuing Operations Before Income Taxes

(81

)

66

(223

)%

(1,538

)

181

(950

)%

Income tax expense (benefit)

(19

)

16

219

%

(373

)

57

754

%

Net Income (Loss)

$

(62

)

$

50

(224

)%

$

(1,165

)

$

124

(1,040

)%

Capital Expenditures by Segment

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019 (1)

Houston Electric T&D

$

215

$

239

$

729

$

722

Indiana Electric Integrated

77

46

191

135

Natural Gas Distribution

314

324

864

773

Corporate and Other

36

43

84

137

Continuing Operations

$

642

$

652

1,868

1,767

Discontinued Operations

14

21

61

Total Capital Expenditures

$

642

$

666

$

1,889

$

1,828

(1) Includes capital expenditures of acquired businesses from February 1, 2019 through September 30, 2019 only due to the Merger.

Interest Expense Detail

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019

Amortization of Deferred Financing Cost

$

7

$

8

$

22

$

22

Capitalization of Interest Cost

(7

)

(10

)

(20

)

(29

)

Securitization Bonds Interest Expense

7

9

22

31

Other Interest Expense

121

136

386

396

Total Interest Expense

$

128

$

143

$

410

$

420

Reference is made to the Combined Notes to Unaudited Condensed Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

CenterPoint Energy, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Millions of Dollars)

(Unaudited)

September 30,
2020

December 31,
2019

ASSETS

Current Assets:

Cash and cash equivalents

$

185

$

241

Current assets held for sale

1,002

Other current assets

2,600

2,694

Total current assets

2,785

3,937

Property, Plant and Equipment, net

21,735

20,624

Other Assets:

Goodwill

4,697

4,882

Regulatory assets

2,150

2,117

Investment in unconsolidated affiliates

749

2,408

Preferred units – unconsolidated affiliate

363

363

Non-current assets held for sale

962

Other non-current assets

226

236

Total other assets

8,185

10,968

Total Assets

$

32,705

$

35,529

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

Current portion of securitization bonds long-term debt

$

208

$

231

Indexed debt

16

19

Current portion of other long-term debt

1,114

618

Current liabilities held for sale

455

Other current liabilities

2,492

2,655

Total current liabilities

3,830

3,978

Other Liabilities:

Deferred income taxes, net

3,575

3,928

Regulatory liabilities

3,480

3,474

Non-current liabilities held for sale

43

Other non-current liabilities

1,486

1,503

Total other liabilities

8,541

8,948

Long-term Debt:

Securitization bonds

610

746

Other

11,336

13,498

Total long-term debt

11,946

14,244

Shareholders' Equity

8,388

8,359

Total Liabilities and Shareholders' Equity

$

32,705

$

35,529

Reference is made to the Combined Notes to Unaudited Condensed Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.

CenterPoint Energy, Inc. and Subsidiaries

Condensed Statements of Consolidated Cash Flows

(Millions of Dollars)

(Unaudited)

Nine Months Ended September 30,

2020

2019

Net income (loss)

$

(973

)

$

634

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

909

1,028

Deferred income taxes

(429

)

8

Goodwill impairment and loss from classification to held for sale

175

Goodwill impairment

185

Write-down of natural gas inventory

3

5

Equity in (earnings) losses of unconsolidated affiliates

1,499

(213

)

Distributions from unconsolidated affiliates

109

226

Changes in net regulatory assets and liabilities

(76

)

(101

)

Changes in other assets and liabilities

36

(511

)

Other, net

1

10

Net cash provided by operating activities

1,439

1,086

Net cash used in investing activities

(683

)

(7,775

)

Net cash provided by (used in) financing activities

(819

)

2,708

Net Decrease in Cash, Cash Equivalents and Restricted Cash

(63

)

(3,981

)

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

271

4,278

Cash, Cash Equivalents and Restricted Cash at End of Period

$

208

$

297

View source version on businesswire.com: https://www.businesswire.com/news/home/20201105005320/en/

Contacts

Media:
Natalie Hedde
Phone: 812.491.5105

Investors:
David Mordy
Phone: 713.207.6500