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Houston, TX – April 30, 2008 - CenterPoint Energy, Inc. (NYSE: CNP) today reported net income of $123 million, or $0.36 per diluted share, for the first quarter of 2008 compared to $130 million, or $0.38 per diluted share, for the same period of 2007.
“While higher natural gas prices had a negative impact on our regulated utilities and on the reported earnings of our competitive natural gas sales and services business, our overall financial results demonstrated the benefit of our balanced portfolio,” said David M. McClanahan, president and chief executive officer of CenterPoint Energy. “The investments we have made over the last several years in our interstate pipelines and field services businesses continue to make significant contributions to our profitability, and in contrast to economic slowdowns in some areas of the country, we continue to experience solid customer growth in our regulated electric and natural gas utilities.”
OPERATING INCOME BY SEGMENT
Electric Transmission & Distribution
The electric transmission & distribution segment reported operating income of $91 million in the first quarter of 2008, consisting of $54 million from the regulated electric transmission & distribution utility operations (TDU), $5 million from the competition transition charge (CTC), and $32 million related to transition bonds. Operating income for the first quarter of 2007 was $104 million, consisting of $62 million from the TDU, $11 million from the CTC, and $31 million related to transition bonds.
Operating income for the TDU for the first quarter of 2008 declined due to reduced usage, resulting in part from milder winter weather, and an increase in transmission costs and other operating expenses. This was partially offset by continued strong customer growth of over 52,000 metered customers since March 2007 and by higher revenues from ancillary services.
Natural Gas Distribution
The natural gas distribution segment reported operating income of $121 million for the first quarter of 2008 compared to $129 million for the same period of 2007. The decrease was attributable to the impact of customer conservation and higher operating expenses primarily related to customer service and bad debts. The decrease was partially offset by continued customer growth of nearly 36,000 metered customers since March 2007 and the benefit of new rates implemented in late 2007.
Interstate Pipelines
The interstate pipelines segment reported operating income of $71 million for the first quarter of 2008 compared to $44 million for the same period of 2007. The increase was driven primarily by the new Carthage to Perryville pipeline, which went into commercial service in May 2007, and increased ancillary services.
Field Services
The field services segment reported operating income of $45 million for the first quarter of 2008 compared to $22 million for the same period of 2007. Operating income increased from higher throughput, increased ancillary services, and $17 million associated with the sale of non-strategic assets and the settlement of a contractual dispute.
In addition to operating income, this business had equity income of $4 million in the first quarter of 2008 compared to $2 million in the first quarter of 2007 from its 50 percent interest in a jointly-owned gas processing plant. These amounts are included in Other – net under the Other Income (Expense) caption.
Competitive Natural Gas Sales and Services
The competitive natural gas sales and services segment reported operating income of $6 million for the first quarter of 2008 compared to $56 million for the same period of 2007. The decline was partially due to reduced locational and seasonal price differentials. In addition, the first quarter of 2008 included charges of $22 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 $8 million for the same period of 2007. The first quarter of 2008 also included $4 million in gains on sales of gas from inventory compared to $28 million for the first quarter of 2007.
DIVIDEND DECLARATION
On April 24, 2008, CenterPoint Energy’s board of directors declared a regular quarterly cash dividend of $0.1825 per share of common stock payable on June 10, 2008, to shareholders of record as of the close of business on May 16, 2008.
OUTLOOK REAFFIRMED FOR 2008
CenterPoint Energy reaffirmed its 2008 earnings guidance of $1.15 to $1.25 per 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 impact to earnings of various regulatory proceedings but 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, or the outcome of the TDU’s true-up appeal.
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, 2008. 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 at 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, April 30, 2008, 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 over $17 billion. With about 8,600 employees, CenterPoint Energy and its predecessor companies have been in business for more than 130 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 period ended December 31, 2007, CenterPoint Energy’s Form 10-Q for the period ended March 31, 2008, and other filings with the Securities and Exchange Commission.
