CenterPoint Energy and subsidiary announce non-cash impairment charges related to Midstream Investments
2015-11-05T06:00:00Z

HOUSTON, Nov. 5, 2015 – CenterPoint Energy, Inc. (NYSE: CNP) and its subsidiary, CenterPoint Energy Resources Corp. (CERC), announced today that the 2015 third quarter earnings reflect impairments totaling $862 million related to the 55.4 percent equity investment in Enable Midstream Partners, LP. The non-cash charges include an impairment of CenterPoint Energy’s and CERC’s equity investment in Enable Midstream of $250 million ($156 million after-tax) and its share, $612 million ($381 million after-tax), of the goodwill and long-lived asset impairment charges of approximately $1.1 billion that Enable Midstream reported for the third quarter 2015. The non-cash impairment charges will not affect CenterPoint Energy’s or CERC’s liquidity, cash flows or compliance with debt covenants.

CenterPoint Energy reported a net loss of $391 million dollars, or a loss of $0.91 per diluted share, for the third quarter of 2015. Excluding the impairment charges, third quarter 2015 net income would have been $146 million or $0.34 per diluted share compared with $143 million or $0.33 per diluted share in the same quarter last year. On a guidance basis, third quarter 2015 earnings would have been $0.34 per diluted share, consisting of $0.24 from utility operations and $0.10 from midstream investments. Additional details on third quarter 2015 earnings may be found in CenterPoint Energy’s Nov. 5, 2015, earnings news release.

“While the impairments reduce our reported third quarter results, we are revising earnings guidance from our original range of $1.00 to $1.10 to $1.05 to $1.10 per diluted share. We also continue to target 4 to 6 percent earnings growth through 2018,” said William D. Rogers, executive vice president and chief financial officer of CenterPoint Energy. “Additionally, we continue to believe in the long-term prospects of our midstream investment and we remain focused on providing governance that enhances their performance.”

CenterPoint Energy and CERC evaluate equity method investments for impairment when factors indicate that a decrease in the value of its investment has occurred and the carrying amount of its investment may not be recoverable. An impairment loss, based on the excess of the carrying value over estimated fair value of the investment, is recognized in earnings when an impairment is deemed to be other than temporary. Considerable judgment is used in determining if an impairment loss is other than temporary and the amount of any impairment.  Based on the sustained low Enable Midstream common unit price and further declines in such price during the three months ended Sept. 30, 2015, as well as the market outlook for continued depressed crude oil and natural gas prices impacting the midstream oil and gas industry, CenterPoint Energy and CERC determined in connection with preparation of financial statements for the three months ended Sept. 30, 2015, that an other than temporary decrease in the value of the investment in Enable Midstream had occurred. CenterPoint Energy and CERC wrote down the value of the investment in Enable Midstream to its estimated fair value of $3.6 billion. 

Both the income approach and market approach were utilized to estimate the fair value of CenterPoint Energy’s and CERC’s total investment in Enable Midstream, which includes the limited partner common and subordinated units, general partner interest and incentive distribution rights held by CenterPoint Energy and CERC. The determination of fair value considered a number of relevant factors including Enable Midstream’s common unit price and forecasted results, recent comparable transactions and the limited float of Enable Midstream’s publicly traded common units.

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.

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 regarding future earnings, and future financial performance and results of operations, including, but not limited to earnings guidance, targeted dividend growth rate and any other statements that are not historical facts are forward-looking statements. Each forward-looking statement contained in this news release speaks only as of the date of this release. Factors that could affect actual results include (1) state and federal legislative and regulatory actions or developments affecting various aspects of CenterPoint Energy's businesses (including the businesses of Enable Midstream Partners (Enable Midstream)), including, among others, energy deregulation or re-regulation, pipeline integrity and safety, health care reform, financial reform, tax legislation, and actions regarding the rates charged by CenterPoint Energy's regulated businesses; (2) state and federal legislative and regulatory actions or developments relating to the environment, including those related to global climate change; (3) recording of non-cash goodwill, long-lived asset or other than temporary impairment charges by or related to Enable, (4) timely and appropriate rate actions that allow recovery of costs and a reasonable return on investment; (5) the timing and outcome of any audits, disputes or other proceedings related to taxes; (6) problems with construction, implementation of necessary technology or other issues with respect to major capital projects that result in delays or in cost overruns that cannot be recouped in rates; (7) industrial, commercial and residential growth in CenterPoint Energy's service territories and changes in market demand, including the effects of energy efficiency measures and demographic patterns; (8) the timing and extent of changes in commodity prices, particularly natural gas and natural gas liquids, and the effects of geographic and seasonal commodity price differentials, and the impact of commodity changes on producer related activities; (9 weather variations and other natural phenomena, including the impact on operations and capital from severe weather events; (10) any direct or indirect effects on CenterPoint Energy's facilities, operations and financial condition resulting from terrorism, cyber-attacks, data security breaches or other attempts to disrupt its businesses or the businesses of third parties, or other catastrophic events; (11) the impact of unplanned facility outages; (12) timely and appropriate regulatory actions allowing securitization or other recovery of costs associated with any future hurricanes or natural disasters; (13) changes in interest rates or rates of inflation; (14) commercial bank and financial market conditions, CenterPoint Energy's access to capital, the cost of such capital, and the results of its financing and refinancing efforts, including availability of funds in the debt capital markets; (15) actions by credit rating agencies; (16) effectiveness of CenterPoint Energy's risk management activities; (17) inability of various counterparties to meet their obligations; (18) non-payment for services due to financial distress of CenterPoint Energy's customers; (19) the ability of GenOn Energy, Inc. (formerly known as RRI Energy, Inc.), a wholly owned subsidiary of NRG Energy, Inc., and its subsidiaries to satisfy their obligations to CenterPoint Energy and its subsidiaries; (20) the ability of retail electric providers, and particularly the largest customers of the TDU, to satisfy their obligations to CenterPoint Energy and its subsidiaries; (21) the outcome of litigation; (22) CenterPoint Energy's ability to control costs, invest planned capital, or execute growth projects; (23) the investment performance of pension and postretirement benefit plans; (24) potential business strategies, including restructurings, joint ventures, and acquisitions or dispositions of assets or businesses, for which no assurance can be given that they will be completed or will provide the anticipated benefits to CenterPoint Energy; (25) acquisition and merger activities involving CenterPoint Energy or its competitors; (26) the ability to recruit, effectively transition and retain management and key employees and maintain good labor relations; (27) future economic conditions in regional and national markets and their effects on sales, prices and costs; (28) the performance of Enable Midstream, the amount of cash distributions CenterPoint Energy receives from Enable Midstream, and the value of its interest in Enable Midstream, and factors that may have a material impact on such performance, cash distributions and value, including certain of the factors specified above and: (A) the integration of the operations of the businesses contributed to Enable Midstream; (B) the achievement of anticipated operational and commercial synergies and expected growth opportunities, and the successful implementation of  Enable Midstream's business plan; (C) competitive conditions in the midstream industry, and actions taken by Enable Midstream's customers and competitors, including the extent and timing of the entry of additional competition in the markets served by Enable Midstream; (D) the timing and extent of changes in the supply of natural gas and associated commodity prices, particularly natural gas and natural gas liquids, the competitive effects of the available pipeline capacity in the regions served by Enable Midstream, and the effects of geographic and seasonal commodity price differentials, including the effects of these circumstances on re-contracting available capacity on Enable Midstream's interstate pipelines; (E) the demand for crude oil, natural gas, NGLs and transportation and storage services; (F) changes in tax status; (G) access to growth capital; and (H) the availability and prices of raw materials for current and future construction projects; (29) effective tax rate; (30) the effect of changes in and application of accounting standards and pronouncements; (31) other factors discussed in CenterPoint Energy's Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as well as in CenterPoint Energy’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, June 30, 2015, and September 30, 2015, and other reports CenterPoint Energy or its subsidiaries may file from time to time with the Securities and Exchange Commission.

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, and adjusted net income to reflect the impact of the impairments, which are non-GAAP financial measures. 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 and net income, adjusted for the impairment, 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. 

some_text CenterPoint Energy

View More Tweets ›

 Recent News

 

 

CenterPoint Energy declares $0.2675 quarterly dividend

Houston – July 27, 2017 - CenterPoint Energy, Inc.'s. (NYSE: CNP) board of directors today declared a regular quarterly cash dividend of $0.2675 per share of common stock payable on Sept. 8, 2017, to shareholders of record as of the close of business on Aug. 16, 2017.

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 54.1 percent of the common and subordinated units representing limited partner interests 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 7,700 employees, CenterPoint Energy and its predecessor companies have been in business for more than 150 years. For more information, go to www.CenterPointEnergy.com.

CenterPoint Energy Provides Natural Gas Safety Tips to Help Keep Customers Safe in Severe Weather

MINNEAPOLIS – July 17, 2017 – While summer conditions are here for Minnesotans, the threat of severe weather can occur at a moment's notice. To help keep customers safe, CenterPoint Energy is sharing its natural gas safety tips. CenterPoint Energy customers should remember the following important information in the event of severe weather conditions:

  • Following a severe storm, be alert for leaking natural gas. If you smell, hear or see a natural gas leak, leave the area immediately on foot and tell others to do the same. Natural gas smells like rotten eggs;
  • Do not drive into or near a natural gas leak or a vapor cloud;
  • Once safely away from the area, call 911 immediately. Then call the pipeline operator to report the location and a description of the leak. CenterPoint Energy's emergency natural gas leak hotline is 1-800-296-9815. After receiving a call, CenterPoint Energy will promptly dispatch a trained service technician;  
  • If natural gas is leaking, do not switch lights on or off, smoke, strike a match, use a cell phone, drive a car, or operate anything that may cause a spark, including a flashlight or generator;
  • Do not attempt to turn off your natural gas service at the meter. Meters maintain proper line pressure and prevent water from entering pipes if flooding occurs. Improper operation of natural gas valves could make the situation worse;
  • To turn off natural gas service inside your house, turn the natural gas valve off at each appliance;
  • If your home was flooded, call a licensed plumber or natural gas appliance technician to inspect your appliances and natural gas piping to make sure they are in good operating condition before calling CenterPoint Energy to reconnect service. This includes outdoor natural gas appliances, such as pool heaters, natural gas grills and natural gas lights; and
  • Before cleaning up debris, or possibly excavating near underground natural gas lines and other utility lines, call 811 – the national Call Before You Dig number – to ensure underground utilities are properly located and marked.

 

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 54.1 percent of the common and subordinated units representing limited partner interests 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 7,700 employees, CenterPoint Energy and its predecessor companies have been in business for more than 150 years. In Minnesota, CenterPoint Energy is the state's largest natural gas distribution utility, serving about 840,000 customers in 260 communities. The utility also operates a non-regulated business in Minnesota called Home Service Plus®. For more information, visit CenterPointEnergy.com.

 

CenterPoint Energy named a 2017 Most Trusted Brand

HOUSTON – July 13, 2017 – CenterPoint Energy earned a 2017 "Most Trusted Brand" designation, making it one of the nation's most trusted utilities according to a new Cogent Reports™ study by Market Strategies International. The Utility Trusted Brand and Customer Engagement: Residential study, now in its fourth year, benchmarks brand performance of 130 electric and natural gas utilities on a quarterly basis among 59,823 utility consumers.  The study measures Brand Trust through scoring six factors among residential customers – customer focus, company reputation and advocacy, community support, communications effectiveness, environmental dedication and reliable quality.

"We have made substantial investments over the last several years to enhance the safety and reliability of our natural gas system and to improve our service to customers," said Gregory E. Knight, senior vice president and chief customer officer for CenterPoint Energy. "We believe being named a 'most trusted brand' clearly demonstrates that customers value and appreciate these efforts."

This year, the utilities designated by Cogent as 2017 Most Trusted Brands score 40 points higher on brand trust than their industry peers and are more likely to receive positive sentiments from their customers in the study.  The annual study highlights a statistical relationship between brand trust and rate case support, and shows customers expect utilities to expand support for new offerings and community outreach as a result of rate increases. Additionally, customers who trust their utility are twice as likely to recommend those alternative energy products to other customers.

 

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 54.1 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 7,700 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.

CenterPoint Energy urges customers to be prepared for potential flooding and issues important electric and natural gas safety tips

HOUSTON – June 21, 2017 – CenterPoint Energy has been closely monitoring and preparing for Tropical Storm Cindy, which is anticipated to make landfall later today. The company urges customers to follow important pre-and post-storm electric and natural gas safety tips.

Electric

  • Stay away from downed power lines. Be especially mindful of downed lines that could be hidden in flood waters and treat all downed lines as if they are energized. 
  • If you experience flooding and water has risen above the electrical outlets in your home, contact a licensed electrician before turning on the main circuit breaker or trying to restore power. 
  • All electrical appliances and electronic equipment that have been submerged in water need to dry thoroughly for at least one week. Then, have them checked by a qualified repair person before turning them on. Attempting to repair a flood-damaged appliance could result in electrical shock or death. Attempting to restart it could result in further damage and costly repairs.
  • If the outside unit of an air conditioning system has been under water, mud and water may have accumulated in the controls. Have the unit checked by a qualified air conditioning technician.

Natural Gas

  • Do not turn off your natural gas service at the meter; doing so could allow water to enter the natural gas lines.
  • Be alert for the smell of natural gas. If you smell gas, leave the area immediately and tell others to leave, too.
  • If you smell gas, do not turn the lights on or off, smoke, strike a match, use a cell phone or operate anything that might cause a spark, including a flashlight or a generator.
  • Do not attempt to turn natural gas valves on or off. Once safely away from the area, call 888-876-5786 and CenterPoint Energy will send a trained service technician.
  • If your home was flooded, call a licensed plumber or gas appliance technician to inspect your appliances and gas piping to make sure they are in good operating condition before calling CenterPoint Energy to reconnect service. This includes outdoor gas appliances including pool heaters, gas grills and gas lights.
  • Before cleaning debris, digging on your property or to locate underground natural gas lines and other underground utility lines, call 811 - the nationwide Call Before You Dig number.
  • Be aware of where your natural gas meter is located. As debris is put out for heavy trash pickup, make sure it is placed away from the meter. In many areas the meter may be located near the curb. If debris is near a gas meter, the mechanized equipment used by trash collectors could pull up the meter, damaging it and causing a potentially hazardous situation. If this happens, leave the area immediately and call CenterPoint Energy at 888-876-5786.

For the latest information on power outages:

CenterPoint Energy names 2016 Energy Efficiency Achievement Award recipients

MINNEAPOLIS – June 15, 2017 – CenterPoint Energy recently announced the three recipients of the 2016 Conservation Improvement Program (CIP) Energy Efficiency achievement awards at the 2017 Energy Efficiency and Technology Conference: Customer of the Year; Trade Ally of the Year; and Most Innovative Project of the year.

"We congratulate our winners and are confident that our Conservation Improvement Programs make it easier than ever for customers to become more energy efficient and save money on their monthly energy bills," said Brad Tutunjian, vice president of Gas Operations for CenterPoint Energy in Minnesota.  "Taking steps toward becoming energy efficient is good for consumers' wallets and the environment."

CenterPoint Energy's 2016 Energy Efficiency Achievement Awards:

  • 2016 Conservation Improvement Program Customer of the Year: General Mills, Inc.
    General Mills has demonstrated a long-term commitment to energy conservation. The company completed two major conservation improvement program projects in 2016.  This first was a project for custom-fit insulation jackets for 800 different steam fittings, saving 9,344 dekatherms (Dth) per year. General Mills said the technology shows promise for its other commercial and industrial sites.  The second project used CenterPoint Energy's Process Steam Trap Audit program to test 472 traps at General Mills' James Ford Bell Test Lab. The audit showed that 18 of the traps had failed. Replacements saved the company 4,436 Dth per year.
  • 2016 Trade Ally of the Year: State Supply
    In 2016, State Supply played an important role in facilitating and expediting natural gas rebates for their customers. The company's focus on steam trap projects enabled CenterPoint Energy to set new savings records for prescriptive rebates and steam trap repair/replacement rebates.  State Supply's commitment to their customers, as well as to CenterPoint Energy's Conservation Improvement Program, resulted in more than 157,557 Dth of savings. 
  • Most Innovative Project of the Year: Utepils Brewing
    Utepils Brewing is a new micro-brewery located on the west side of Minneapolis. In 2016, the company installed state-of-the-art German brewery technology involving heat recovery and vacuum de-pressurization. This step helped  decrease the energy consumption of the brewing process by 70 percent.

"We would like to take this opportunity to thank those who participated in our CIP programs in 2016 and helped achieve record natural gas savings of just over 2.0 billion cubic feet.  The savings during 2016 were the equivalent to the annual natural gas usage of 22,200 residential homes and the emissions savings were the equivalent to removing 17,800 cars from the road for one year," added Tutunjian.

CenterPoint Energy is committed to energy conservation and has been a leader in delivering Conservation Improvement Programs in Minnesota since 1992.  The company has significantly increased its energy efficiency programs to help residential and business customers lower their energy costs. In addition to foodservice equipment rebates, the company offers rebates for high-efficiency heating systems, water heaters, industrial process equipment and custom projects for commercial and industrial businesses.

To learn more about how to get started saving money and being more energy efficient today, visit CenterPointEnergy.com/SaveEnergy.

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 54.1 percent of the common and subordinated units representing limited partner interests 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 7,700 employees, CenterPoint Energy and its predecessor companies have been in business for more than 150 years. In Minnesota, CenterPoint Energy is the state's largest natural gas distribution utility, serving about 840,000 customers in 260 communities. The utility also operates a non-regulated business in Minnesota called Home Service Plus®. For more information, visit CenterPointEnergy.com.