CenterPoint Energy, Inc.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020930/CNPLOGO)
"Despite the weak economy and changing energy markets, our business units continued to perform well," said David M. McClanahan, president and chief executive officer of CenterPoint Energy. "Our regulated electric and gas utilities turned in solid operating performances as did our pipeline and field services core operations. However, revenues from ancillary services declined from 2008 when we benefited from unusually high commodity prices. We continue to believe that the overall fundamentals of our balanced portfolio of electric and natural gas businesses remain strong and position us well as the economy recovers and the energy markets rebound."
For the six months ended June 30, 2009, net income was $153 million, or $0.44 per diluted share, compared to $223 million, or $0.66 per diluted share, for the same period of 2008. Operating income for the six months ended June 30, 2009, was $538 million compared to $633 million for the same period of 2008.
OPERATING INCOME BY SEGMENT Electric Transmission & Distribution
The electric transmission & distribution segment reported operating income of $162 million for the second quarter of 2009, consisting of $129 million from the regulated electric transmission & distribution utility operations (TDU) and $33 million related to transition bonds. Operating income for the second quarter of 2008 was $164 million, consisting of $129 million from the TDU and $35 million related to transition bonds. Operating income for the TDU benefited from growth of over 28,000 metered customers since June 2008 and higher net transmission revenues. Operating income for the second quarter of 2008 included a $9 million gain from a land sale.
As a result of the storm restoration cost recovery legislation enacted by the Texas Legislature in April 2009, the company recorded a regulatory asset of $41 million for carrying costs incurred through June 30, 2009, on amounts it spent for Hurricane Ike storm restoration. Of that amount, $14 million was reflected in the company's second quarter 2009 earnings, and the remaining $27 million will be recognized over the life of the storm cost recovery bonds the company expects to issue later this year.
Operating income for the six months ended June 30, 2009, was $232 million, consisting of $166 million from the TDU and $66 million related to transition bonds. Operating income for the same period of 2008 was $255 million, consisting of $183 million from the TDU, $67 million related to transition bonds and $5 million from the competition transition charge (CTC). The CTC was discontinued in February 2008 when the company securitized the remaining true-up balance.
Natural Gas Distribution
The natural gas distribution segment reported operating income of $2 million for the second quarter of 2009 compared to $4 million for the same period of 2008. Operating income benefited from rate increases and lower bad debt expense, which were more than offset by higher pension and other employee-related expenses. Due to seasonal impacts, this segment typically reports minimal earnings in the second quarter.
Operating income for the six months ended June 30, 2009, was $120 million compared to $125 million for the same period of 2008.
Interstate Pipelines
The interstate pipelines segment reported operating income of $61 million for the second quarter of 2009 compared to $101 million for the same period of 2008. Operating income for the second quarter of 2008 included an $18 million gain from the sale of two storage development projects. Operating income benefited from higher revenue from the Carthage to Perryville pipeline and from new firm transportation contracts for gas-fired power generation, which were more than offset by a decline in ancillary services due to significantly lower commodity prices, as well as higher pension and other operation and maintenance expenses.
In addition to operating income, this business had equity income of $9 million for the second quarter of 2009 from its 50 percent interest in the Southeast Supply Header (SESH), a new pipeline that went into service in September 2008. In the second quarter of 2008, equity income was $10 million from pre-operating allowance for funds used during construction.
Operating income for the six months ended June 30, 2009, was $130 million compared to $172 million for the same period of 2008. In addition to operating income, this business had equity income of $7 million for the six months ended June 30, 2009, from its interest in SESH. In the first quarter of 2009, the company recorded a non-cash charge of $5 million to reflect SESH's decision to discontinue the use of Statement of Financial Accounting Standards No.71 - Accounting for the Effects of Certain Types of Regulation. For the six months ended June 30, 2008, equity income was $15 million from pre-operating allowance for funds used during construction.
Field Services
The field services segment reported operating income of $23 million for the second quarter of 2009 compared to $32 million for the same period of 2008. Solid growth in core gathering services was more than offset by the effect of lower natural gas and liquids prices, which declined from significantly higher levels in 2008.
In addition to operating income, this business had equity income of $2 million in the second quarter of 2009 compared to $4 million in the second quarter of 2008 from its 50 percent interest in a gas processing plant. The decline was due primarily to lower natural gas liquids prices.
Operating income for the six months ended June 30, 2009, was $49 million compared to $77 million for the same period of 2008. Operating income for the six months ended June 30, 2008, included gains of $17 million associated with the settlement of a contractual dispute and the sale of non-strategic assets. Equity income from the jointly-owned gas processing plant was $4 million for the six months ended June 30, 2009, compared to $8 million for the same period of 2008.
Competitive Natural Gas Sales and Services
The competitive natural gas sales and services segment reported operating income of $6 million for the second quarter of 2009 compared to an operating loss of $5 million for the same period of 2008. Operating income for the second quarter of 2009 included gains of $3 million resulting from mark-to-market accounting for derivatives used to lock in economic margins of certain forward natural gas sales compared to charges of $10 million for the same period of 2008.
Operating income for the six months ended June 30, 2009, was $8 million compared to $1 million for the same period of 2008. Operating income for the six months ended June 30, 2009, included charges of $16 million resulting from mark-to-market accounting compared to charges of $32 million for the same period of 2008. The six months ended June 30, 2009 also included $6 million in write-downs of inventory to the lower of average cost or market.
DIVIDEND DECLARATION
On July 23, 2009, CenterPoint Energy's board of directors declared a regular quarterly cash dividend of $0.19 per share of common stock payable on September 10, 2009, to shareholders of record as of the close of business on August 14, 2009.
OUTLOOK REAFFIRMED FOR 2009
CenterPoint Energy reaffirmed its 2009 earnings guidance of $1.05 to $1.15 per diluted share. This guidance takes into consideration various economic and operational assumptions related to the business segments in which the company operates. The company has made certain assumptions regarding the timing and cost of certain financing activities and the impact to earnings of various regulatory proceedings, including recovery of costs associated with Hurricane Ike. The company cannot predict the ultimate outcome of any of those proceedings. In providing this guidance, the company has not projected the impact of any changes in accounting standards, any impact from acquisitions or divestitures, the timing effects of mark-to-market or inventory accounting in the company's competitive natural gas sales and services business, or the outcome of the TDU's true-up appeal. The company has also excluded any impact to income from the change in value of Time Warner stocks and the related ZENS securities.
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 period ended June 30, 2009. A copy of that report is available on the company's Web site, www.CenterPointEnergy.com, under the Investors section. Other filings the company makes with the SEC and other documents relating to its corporate governance can also be found on that site.
WEBCAST OF EARNINGS CONFERENCE CALL
CenterPoint Energy's management will host an earnings conference call on Wednesday, August 5, 2009, at 10:30 a.m. Central time or 11:30 a.m. Eastern time. Interested parties may listen to a live audio broadcast of the conference call at www.CenterPointEnergy.com. A replay of the call can be accessed approximately two hours after the completion of the call and will be archived on the Web site for at least one year.
CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution, competitive natural gas sales and services, interstate pipelines, and field services operations. The company serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. Assets total nearly $19 billion. With about 8,800 employees, CenterPoint Energy and its predecessor companies have been in business for more than 135 years. For more information, visit the Web site at www.CenterPointEnergy.com.
This news release includes forward-looking statements. Actual events and results may differ materially from those projected. The statements in this news release regarding future financial performance and results of operations and other statements that are not historical facts are forward-looking statements. Factors that could affect actual results include the timing and outcome of appeals from the true-up proceedings, the timing and impact of future regulatory, legislative, and IRS decisions, effects of competition, weather variations, changes in CenterPoint Energy's or its subsidiaries' business plans, financial market conditions, the timing and extent of changes in commodity prices, particularly natural gas, the impact of unplanned facility outages, and other factors discussed in CenterPoint Energy's and its subsidiaries' Form 10-Ks for the fiscal year ended December 31, 2008, CenterPoint Energy's and its subsidiaries' Form 10-Qs for the periods ended March 31, 2009, CenterPoint Energy's Form 10-Q for the period ended June 30, 2009, and other filings with the SEC.
For more information contact
Media:
Leticia Lowe
Phone 713-207-7702
Investors:
Marianne Paulsen
Phone 713-207-6500
CenterPoint Energy, Inc. and Subsidiaries
Statements of Consolidated Income
(Millions of Dollars)
(Unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
-------- --------
2008 2009 2008 2009
---- ---- ---- ----
Revenues:
Electric Transmission &
Distribution $510 $521 $919 $933
Natural Gas Distribution 726 518 2,426 1,939
Competitive Natural Gas Sales
and Services 1,243 432 2,363 1,197
Interstate Pipelines 192 155 325 308
Field Services 62 56 120 113
Other Operations 2 3 5 6
Eliminations (65) (45) (125) (90)
--- --- ---- ---
Total 2,670 1,640 6,033 4,406
----- ----- ----- -----
Expenses:
Natural gas 1,750 710 4,143 2,499
Operation and maintenance 342 398 707 811
Depreciation and amortization 188 188 346 354
Taxes other than income taxes 93 91 204 204
--- --- --- ---
Total 2,373 1,387 5,400 3,868
----- ----- ----- -----
Operating Income 297 253 633 538
--- --- --- ---
Other Income (Expense) :
Gain (loss) on marketable
securities 17 55 (37) 21
Gain (loss) on indexed debt
securities (17) (46) 33 (24)
Interest and other finance
charges (114) (129) (230) (258)
Interest on transition bonds (35) (33) (68) (66)
Equity in earnings of
unconsolidated affiliates 14 11 23 11
Other - net - 18 4 22
--- --- --- ---
Total (135) (124) (275) (294)
---- ---- ---- ----
Income Before Income Taxes 162 129 358 244
Income Tax Expense (61) (43) (135) (91)
--- --- ---- ---
Net Income $101 $86 $223 $153
==== === ==== ====
Reference is made to the Notes to the 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)
Quarter Ended Six Months Ended
June 30, June 30,
-------- --------
2008 2009 2008 2009
---- ---- ---- ----
Basic Earnings Per
Common Share $0.30 $0.24 $0.68 $0.44
===== ===== ===== =====
Diluted Earnings Per
Common Share $0.30 $0.24 $0.66 $0.44
===== ===== ===== =====
Dividends Declared per
Common Share $0.1825 $0.19 $0.365 $0.38
Weighted Average
Common Shares
Outstanding (000):
- Basic 331,354 352,461 329,316 346,660
- Diluted 342,027 354,280 340,873 348,522
Operating Income by Segment
----------------------------
Electric Transmission &
Distribution:
Electric Transmission
and Distribution
Operations $129 $129 $183 $166
Competition Transition
Charge - - 5 -
--- --- --- ---
Total Electric
Transmission and
Distribution
Utility 129 129 188 166
Transition Bond
Companies 35 33 67 66
--- --- --- ---
Total Electric
Transmission &
Distribution 164 162 255 232
Natural Gas Distribution 4 2 125 120
Competitive Natural Gas
Sales and Services (5) 6 1 8
Interstate Pipelines 101 61 172 130
Field Services 32 23 77 49
Other Operations 1 (1) 3 (1)
--- --- --- ---
Total $297 $253 $633 $538
==== ==== ==== ====
Reference is made to the Notes to the 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)
(Unaudited)
Electric Transmission & Distribution
------------------------------------
Quarter Six Months
Ended Ended
June 30, June 30,
-------- % Diff -------- % Diff
Fav/ Fav/
2008 2009 (Unfav) 2008 2009 (Unfav)
---- ---- ------- ---- ---- -----
Results of
Operations:
Revenues:
Electric
transmission
and
distribution
utility $419 $432 3% $765 $778 2%
Transition
bond
companies 91 89 (2%) 154 155 1%
--- --- --- ---
Total 510 521 2% 919 933 2%
--- --- --- ---
Expenses:
Operation and
maintenance 167 181 (8%) 335 369 (10%)
Depreciation
and
amortization 71 69 3% 137 137 -
Taxes other
than income
taxes 52 53 (2%) 105 106 (1%)
Transition
bond
companies 56 56 - 87 89 (2%)
--- --- --- ---
Total 346 359 (4%) 664 701 (6%)
--- --- --- ---
Operating Income $164 $162 (1%) $255 $232 (9%)
==== ==== ==== ====
Operating Income:
Electric
transmission
and
distribution
operations $129 $129 - $183 $166 (9%)
Competition
transition
charge - - - 5 - (100%)
Transition
bond
companies 35 33 (6%) 67 66 (1%)
--- --- --- ---
Total
Segment
Operating
Income $164 $162 (1%) $255 $232 (9%)
==== ==== ==== ====
Electric
Transmission
& Distribution
Operating Data:
Actual MWH
Delivered
Residential 6,774,069 6,831,444 1% 11,177,381 10,797,963 (3%)
Total 20,359,540 19,840,955 (3%) 36,929,230 34,983,263 (5%)
Weather (average
for service area):
Percentage of
10-year average:
Cooling
degree days 111% 108% (3%) 113% 109% (4%)
Heating
degree days 73% 112% 39% 95% 89% (6%)
Number of
metered
customers -
end of period:
Residential 1,820,092 1,846,908 1% 1,820,092 1,846,908 1%
Total 2,063,924 2,092,209 1% 2,063,924 2,092,209 1%
Natural Gas Distribution
------------------------
Quarter Six Months
Ended Ended
June 30, June 30,
-------- % Diff -------- % Diff
Fav/ Fav/
2008 2009 (Unfav) 2008 2009 (Unfav)
---- ---- ------- ---- ---- -----
Results of
Operations:
Revenues $726 $518 (29%) $2,426 $1,939 (20%)
---- ---- ------ ------
Expenses:
Natural gas 512 295 42% 1,845 1,340 27%
Operation and
maintenance 141 152 (8%) 297 321 (8%)
Depreciation
and
amortization 39 41 (5%) 78 81 (4%)
Taxes other
than income
taxes 30 28 7% 81 77 5%
--- --- --- ---
Total 722 516 29% 2,301 1,819 21%
--- --- ----- -----
Operating Income $4 $2 (50%) $125 $120 (4%)
=== === ==== ====
Natural Gas Distribution
Operating Data:
Throughput data in BCF
Residential 20 20 - 104 98 (6%)
Commercial and
Industrial 47 43 (9%) 130 116 (11%)
--- --- --- ---
Total
Throughput
67 63 (6%) 234 214 (9%)
=== === === ===
Weather (average for
service area)
Percentage of 10-year
average:
Heating degree
days 113% 109% (4%) 107% 103% (4%)
Number of customers -
end of period:
Residential 2,945,460 2,961,941 1% 2,945,460 2,961,941 1%
Commercial and
Industrial 250,993 241,875 (4%) 250,993 241,875 (4%)
------- ------- ------- -------
Total 3,196,453 3,203,816 - 3,196,453 3,203,816 -
========= ========= ========= =========
Reference is made to the Notes to the 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)
(Unaudited)
Competitive Natural Gas Sales and Services
------------------------------------------
Quarter Six Months
Ended Ended
June 30, June 30,
-------- % Diff -------- % Diff
Fav/ Fav/
2008 2009 (Unfav) 2008 2009 (Unfav)
---- ---- ------- ---- ---- -------
Results of
Operations:
Revenues $1,243 $432 (65%) $2,363 $1,197 (49%)
------ ---- ------ ------
Expenses:
Natural gas 1,237 414 67% 2,342 1,166 50%
Operation and
maintenance 10 10 - 18 20 (11%)
Depreciation
and
amortization - 1 - 1 2 (100%)
Taxes other
than income
taxes 1 1 - 1 1 -
--- --- --- ---
Total 1,248 426 66% 2,362 1,189 50%
----- --- ----- -----
Operating Income
(Loss) $(5) $6 220% $1 $8 700%
=== === === ===
Competitive Natural
Gas Sales and
Services Operating
Data:
Throughput data in
BCF 129 114 (12%) 267 255 (4%)
=== === === ===
Number of
customers - end
of period 8,923 10,878 22% 8,923 10,878 22%
===== ====== ===== ======
Interstate Pipelines
--------------------
Quarter Six Months
Ended Ended
June 30, June 30,
-------- % Diff -------- % Diff
Fav/ Fav/
2008 2009 (Unfav) 2008 2009 (Unfav)
---- ---- ------- ---- ---- -------
Results of
Operations:
Revenues $192 $155 (19%) $325 $308 (5%)
---- ---- ---- ----
Expenses:
Natural gas 58 34 41% 73 63 14%
Operation and
maintenance 16 41 (156%) 46 76 (65%)
Depreciation
and
amortization 11 12 (9%) 23 24 (4%)
Taxes other
than income
taxes 6 7 (17%) 11 15 (36%)
--- --- --- ---
Total 91 94 (3%) 153 178 (16%)
--- --- --- ---
Operating Income $101 $61 (40%) $172 $130 (24%)
==== === ==== ====
Pipelines Operating Data:
Throughput data in BCF
Transportation 361 390 8% 785 857 9%
=== === === ===
Reference is made to the Notes to the 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)
(Unaudited)
Field Services
--------------
Quarter Six Months
Ended Ended
June 30, June 30,
-------- % Diff -------- % Diff
Fav/ Fav/
2008 2009 (Unfav) 2008 2009 (Unfav)
---- ---- ------- ---- ---- -------
Results of Operations:
Revenues $62 $56 (10%) $120 $113 (6%)
--- --- ---- ----
Expenses:
Natural gas 8 11 (38%) 6 18 (200%)
Operation and
maintenance 18 18 - 29 37 (28%)
Depreciation and
amortization 3 3 - 6 7 (17%)
Taxes other than
income taxes 1 1 - 2 2 -
--- --- --- ---
Total 30 33 (10%) 43 64 (49%)
--- --- --- ---
Operating Income $32 $23 (28%) $77 $49 (36%)
=== === === ===
Field Services Operating Data:
Throughput data in BCF
Gathering 104 102 (2%) 202 206 2%
=== === === ===
Other Operations
----------------
Quarter Six Months
Ended Ended
June 30, June 30,
-------- % Diff -------- % Diff
Fav/ Fav/
2008 2009 (Unfav) 2008 2009 (Unfav)
---- ---- ------- ---- ---- -------
Results of Operations:
Revenues $2 $3 50% $5 $6 20%
Expenses 1 4 (300%) 2 7 (250%)
--- --- --- ---
Operating Income (Loss) $1 $(1) (200%) $3 $(1) (133%)
=== === === ===
Capital Expenditures by Segment
(Millions of Dollars)
(Unaudited)
Quarter Six Months
Ended Ended
June 30, June 30,
-------- --------
2008 2009 2008 2009
---- ---- ---- ----
Capital Expenditures
by Segment
Electric Transmission
& Distribution $87 $108 $176 $189
Hurricane Ike - 2 - 18
--- --- --- ---
Total Electric
Transmission &
Distribution 87 110 176 207
Natural Gas
Distribution 56 43 94 77
Competitive Natural
Gas Sales and
Services 1 - 2 1
Interstate Pipelines 42 27 70 74
Field Services 28 66 46 104
Other Operations 5 2 13 9
--- --- --- ---
Total $219 $248 $401 $472
==== ==== ==== ====
Interest Expense Detail
(Millions of Dollars)
(Unaudited)
Quarter Six Months
Ended Ended
June 30, June 30,
-------- --------
2008 2009 2008 2009
---- ---- ---- ----
Interest Expense Detail
Amortization of
Deferred Financing
Cost $6 $9 $12 $18
Capitalization of
Interest Cost (4) (1) (7) (3)
Transition Bond
Interest Expense 35 33 68 66
Other Interest Expense 112 121 225 243
--- --- --- ---
Total Interest
Expense $149 $162 $298 $324
==== ==== ==== ====
Reference is made to the Notes to the 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)
December 31, June 30,
2008 2009
---- ----
ASSETS
Current Assets:
Cash and cash equivalents $167 $151
Other current assets 2,868 1,777
----- -----
Total current assets 3,035 1,928
----- -----
Property, Plant and Equipment, net 10,296 10,524
------ ------
Other Assets:
Goodwill 1,696 1,696
Regulatory assets 3,684 3,606
Other non-current assets 965 963
--- ---
Total other assets 6,345 6,265
----- -----
Total Assets $19,676 $18,717
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $153 $75
Current portion of transition bond long-term debt 208 211
Current portion of other long-term debt 125 133
Other current liabilities 2,362 1,675
----- -----
Total current liabilities 2,848 2,094
----- -----
Other Liabilities:
Accumulated deferred income taxes, net and
investment tax credit 2,632 2,627
Regulatory liabilities 821 874
Other non-current liabilities 1,172 1,254
----- -----
Total other liabilities 4,625 4,755
----- -----
Long-term Debt:
Transition bond 2,381 2,274
Other 7,800 7,357
----- -----
Total long-term debt 10,181 9,631
------ -----
Shareholders' Equity 2,022 2,237
----- -----
Total Liabilities and Shareholders' Equity $19,676 $18,717
======= =======
Reference is made to the Notes to the 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)
Six Months
Ended June 30,
-----------
2008 2009
---- ----
Cash Flows from Operating Activities:
Net income $223 $153
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 361 374
Deferred income taxes 12 78
Write-down of natural gas inventory - 6
Changes in net regulatory assets 14 19
Changes in other assets and liabilities 256 422
Other, net 2 4
--- ---
Net Cash Provided by Operating Activities 868 1,056
Net Cash Used in Investing Activities (700) (504)
Net Cash Used in Financing Activities (147) (568)
---- ----
Net Increase (Decrease) in Cash and Cash
Equivalents 21 (16)
Cash and Cash Equivalents at Beginning of
Period 129 167
---- ----
Cash and Cash Equivalents at End of Period $150 $151
==== ====
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc.
First Call Analyst:
FCMN Contact: leticia.lowe@centerpointenergy.com
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CONTACT: Media, Leticia Lowe, +1-713-207-7702, or Investors, Marianne
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Web Site: http://www.centerpointenergy.com/