- Strong customer growth continues:
- Continued 2% annualized growth in metered electric customers
- Continued 1% growth in new gas customers
- Initiated key rate filings, including Houston Electric’s DCRF filing and Gas Operations’ Texas Coast rate case and GRIP filings
- Company reaffirms full-year 2015 consolidated earnings guidance of $1.00 - $1.10 per diluted share; $0.71 - 0.75 utility operations and $0.29 - $0.35 for equity investment in midstream operations
Houston, TX – May 11, 2015 - CenterPoint Energy, Inc. (NYSE: CNP) today reported net income of $131 million, or $0.30 per diluted share, for the first quarter of 2015, compared with $185 million, or $0.43 per diluted share for the same period of the prior year. On a guidance basis, for the first quarter 2015, CenterPoint Energy earned 30 cents per diluted share. Utility operations earned 22 cents per diluted share and the equity investment in midstream operations earned 8 cents per diluted share.
Operating income for the first quarter of 2015 was $256 million, compared with $295 million in the prior year. Equity income from the company’s investment in midstream operations was $52 million, for the first quarter of 2015, compared with $91 million in the prior year.
“I’m pleased with our first quarter results, which were in-line with our forecasts,” said Scott M. Prochazka, president and chief executive officer of CenterPoint Energy. “Our utilities continue to benefit from strong customer growth, and ongoing attention to cost management. Further, we filed several key rate recovery mechanisms in the quarter. Enable Midstream continues to execute their long-term strategy despite the challenges associated with a lower commodity price environment.”
Electric Transmission & Distribution
The electric transmission & distribution segment reported operating income of $96 million for the first quarter of 2015, consisting of $68 million from the regulated electric transmission & distribution utility operations (TDU) and $28 million related to securitization bonds. Operating income for the first quarter of 2014 was $105 million, consisting of $75 million from the TDU and $30 million related to securitization bonds.
Operating income for the TDU benefited primarily from higher net transmission-related revenues ($7 million) and continued strong customer growth ($6 million).These benefits were more than offset largely due to milder weather and the related weather hedge ($8 million), reduced equity return ($6 million) and lower right of way revenues ($3 million).
Natural Gas Distribution
The natural gas distribution segment reported operating income of $146 million for the first quarter of 2015, compared with $162 million for the same period of 2014.Operating income benefited from rate relief and customer growth ($7 million). Such benefits were more than offset by reduced usage due to milder weather primarily in our Minnesota service territory ($9 million) and higher depreciation and amortization expense and taxes ($10 million).
The energy services segment reported operating income of $13 million for the first quarter of 2015, compared to $26 million for the same period of 2014. First quarter operating income for 2015 included a mark-to-market accounting loss of $4 million, compared to a gain of $4 million for the same period of 2014. The remaining decrease in operating income was margin-related, primarily as a result of reduced weather-related optimization opportunities for existing gas transportation assets.
Equity Investment in Midstream Operations
The midstream investments segment reported $52 million of equity income for the first quarter of 2015, compared with $91 million in the prior year. In their May 6, 2015, press release, Enable Midstream stated that the decrease in net income attributable to the partnership is primarily a result of lower gross margin due to lower commodity prices.
Cash distributions received in the first quarter of 2015 were $72 million. Further, Enable Midstream declared a quarterly cash distribution on April 24, 2015, from which CenterPoint Energy expects to receive approximately $73 million. This represents an increase of approximately 1.2 percent over the prior quarter distribution.
Refer to Enable Midstream’s earnings press release issued on May 6, 2015, for detailed results of operations.
On April 23, 2015, CenterPoint Energy’s board of directors declared a regular quarterly cash dividend of $0.2475 per share of common stock payable on June 10, 2015, to shareholders of record as of the close of business on May 15, 2015.
Outlook for 2015
CenterPoint Energy reaffirms that its earnings estimate for 2015 utility operations is in the range of $0.71 to $0.75 per diluted share. The company expects its 2015 earnings estimate from its equity investment in midstream operations to be in the range of $0.29 to $0.35 per diluted share. On a consolidated basis, CenterPoint Energy reaffirms earnings on a guidance basis for 2015 in the range of $1.00 to $1.10 per diluted share.
The utility operations guidance range considers performance to date and certain significant variables that may impact earnings, such as weather, regulatory and judicial proceedings, throughput, commodity prices, effective tax rates, and financing activities. In providing this guidance, the company does not include other potential impacts, such as changes in accounting standards or unusual items, earnings from the change in the value of the ZENS securities and the related stocks, or the timing effects of mark-to-market accounting in the company’s energy service business.
In providing guidance for equity investments in midstream operations, the company assumes a 55.4 percent limited partner ownership interest in Enable Midstream and includes the amortization of our basis differential in Enable Midstream. The company’s guidance takes into account such factors as Enable Midstream's most recent public outlook for 2015 dated May 6, 2015, and effective tax rates. The company does not include other potential impacts such as any changes in accounting standards or Enable Midstream’s unusual items.
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 March 31, 2015. A copy of that report is available on the company’s website, under the Investors section. Other filings the company makes with the SEC and certain documents relating to its corporate governance can also be found under the Investors section.
Webcast of Earnings Conference Call
CenterPoint Energy’s management will host an earnings conference call on Monday, May 11, 2015, 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 on the company’s 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.
CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution and energy services operations. The company serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. The company also owns a 55.4 percent limited partner interest in Enable Midstream Partners, a publicly traded master limited partnership it jointly controls with OGE Energy Corp., which owns, operates and develops natural gas and crude oil infrastructure assets. With more than 7,400 employees, CenterPoint Energy and its predecessor companies have been in business for more than 140 years. For more information, visit the website at www.CenterPointEnergy.com.
Use of Non-GAAP Financial Measures
In addition to presenting its financial results in accordance with generally accepted accounting principles (GAAP), CenterPoint Energy also provides guidance based on adjusted diluted earnings per share, which is a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company’s 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. A reconciliation of net income and diluted earnings per share to the basis used in providing 2015 guidance is provided in this news release.
Management evaluates financial performance in part based on adjusted diluted earnings per share and believes that presenting this non-GAAP financial measure enhances an investor’s understanding of CenterPoint Energy’s overall financial performance by providing them with an additional meaningful and relevant comparison of current and anticipated future results across periods by excluding items that Management does not believe most accurately reflect its fundamental business performance, which items include the items reflected in the reconciliation table of this news release. This non-GAAP financial measure should be considered as a supplement and complement to, and not as a substitute for, or superior to, the most directly comparable GAAP financial measure and may be different than non-GAAP financial measures used by other companies.