HOUSTON, April 30, 2008 (PRIME NEWSWIRE) -- 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/investors/events. 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.
The CenterPoint Energy logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3588
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.
CenterPoint Energy, Inc. and Subsidiaries
Statements of Consolidated Income
(Millions of Dollars)
(Unaudited)
Quarter Ended
March 31,
------------------
2007 2008
------- -------
Revenues:
Electric Transmission & Distribution $ 406 $ 409
Natural Gas Distribution 1,567 1,700
Competitive Natural Gas Sales and Services 1,064 1,120
Interstate Pipelines 90 133
Field Services 39 58
Other Operations 2 3
Eliminations (62) (60)
------- -------
Total 3,106 3,363
------- -------
Expenses:
Natural gas 2,150 2,393
Operation and maintenance 352 365
Depreciation and amortization 145 158
Taxes other than income taxes 106 111
------- -------
Total 2,753 3,027
------- -------
Operating Income 353 336
------- -------
Other Income (Expense) :
Loss on Time Warner investment (44) (54)
Gain on indexed debt securities 41 50
Interest and other finance charges (123) (115)
Interest on transition bonds (31) (33)
Other - net 6 13
------- -------
Total (151) (139)
------- -------
Income Before Income Taxes 202 197
Income Tax Expense (72) (74)
------- -------
Net Income $ 130 $ 123
======= =======
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
March 31,
--------------------
2007 2008
--------- ---------
Basic Earnings Per Common Share:
Net Income $ 0.41 $ 0.38
========= =========
Diluted Earnings Per Common Share:
Net Income $ 0.38 $ 0.36
========= =========
Dividends Declared per Common Share $ 0.17 $ 0.1825
Weighted Average Common Shares Outstanding
(000):
- Basic 318,060 327,279
- Diluted 340,103 339,448
Operating Income (Loss) by Segment
----------------------------------
Electric Transmission & Distribution:
Electric Transmission and Distribution
Operations $ 62 $ 54
Competition Transition Charge 11 5
--------- ---------
Total Electric Transmission and
Distribution Utility 73 59
Transition Bond Companies 31 32
--------- ---------
Total Electric Transmission & Distribution 104 91
Natural Gas Distribution 129 121
Competitive Natural Gas Sales and Services 56 6
Interstate Pipelines 44 71
Field Services 22 45
Other Operations (2) 2
--------- ---------
Total $ 353 $ 336
========= =========
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 Ended
March 31,
------------------------ % Diff
2007 2008 Fav/(Unfav)
----------- ----------- ---------
Results of Operations:
Revenues:
Electric transmission and
distribution utility $ 347 $ 346 --
Transition bond companies 59 63 7%
----------- -----------
Total 406 409 1%
----------- -----------
Expenses:
Operation and maintenance 154 168 (9%)
Depreciation and amortization 63 66 (5%)
Taxes other than income taxes 57 53 7%
Transition bond companies 28 31 (11%)
----------- -----------
Total 302 318 (5%)
----------- -----------
Operating Income $ 104 $ 91 (13%)
=========== ===========
Operating Income:
Electric transmission and
distribution operations $ 62 $ 54 (13%)
Competition transition charge 11 5 (55%)
Transition bond companies 31 32 3%
----------- -----------
Total Segment Operating Income $ 104 $ 91 (13%)
=========== ===========
Electric Transmission &
Distribution
Operating Data:
Actual MWH Delivered
Residential 4,658,059 4,403,312 (5%)
Total 16,659,914 16,569,691 (1%)
Weather (average for service
area):
Percentage of 10-year average:
Cooling degree days 111% 124% 13%
Heating degree days 117% 96% (21%)
Average number of metered
customers:
Residential 1,752,264 1,801,272 3%
Total 1,989,744 2,042,460 3%
Natural Gas Distribution
-----------------------------------
Quarter Ended
March 31,
------------------------ % Diff
2007 2008 Fav/(Unfav)
----------- ----------- ---------
Results of Operations:
Revenues $ 1,567 $ 1,700 8%
----------- -----------
Expenses:
Natural gas 1,212 1,333 (10%)
Operation and maintenance 147 156 (6%)
Depreciation and amortization 38 39 (3%)
Taxes other than income taxes 41 51 (24%)
----------- -----------
Total 1,438 1,579 (10%)
----------- -----------
Operating Income $ 129 $ 121 (6%)
=========== ===========
Natural Gas Distribution Operating
Data:
Throughput data in BCF
Residential 86 84 (2%)
Commercial and Industrial 81 83 2%
----------- -----------
Total Throughput 167 167 --
=========== ===========
Weather (average for service area)
Percentage of 10-year average:
Heating degree days 99% 106% 7%
Average number of customers:
Residential 2,946,203 2,975,591 1%
Commercial and Industrial 245,576 250,988 2%
----------- -----------
Total 3,191,779 3,226,579 1%
=========== ===========
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 Ended
March 31,
--------------------- % Diff
2007 2008 Fav/(Unfav)
--------- --------- ---------
Results of Operations:
Revenues $ 1,064 $ 1,120 5%
--------- ---------
Expenses:
Natural gas 998 1,105 (11%)
Operation and maintenance 9 8 11%
Depreciation and amortization -- 1 --
Taxes other than income taxes 1 -- --
--------- ---------
Total 1,008 1,114 (11%)
--------- ---------
Operating Income $ 56 $ 6 (89%)
========= =========
Competitive Natural Gas Sales and
Services Operating Data:
Throughput data in BCF
Wholesale - third parties 94 70 (26%)
Wholesale - affiliates 3 2 (33%)
Retail & Pipeline 58 66 14%
--------- ---------
Total Throughput 155 138 (11%)
========= =========
Average number of customers:
Wholesale 223 154 (31%)
Retail & Pipeline 6,764 8,338 23%
--------- ---------
Total 6,987 8,492 22%
========= =========
Interstate Pipelines
--------------------------------
Quarter Ended
March 31,
--------------------- % Diff
2007 2008 Fav/(Unfav)
--------- --------- ---------
Results of Operations:
Revenues $ 90 $ 133 48%
--------- ---------
Expenses:
Natural gas 4 15 (275%)
Operation and maintenance 27 30 (11%)
Depreciation and amortization 10 12 (20%)
Taxes other than income taxes 5 5 --
--------- ---------
Total 46 62 (35%)
--------- ---------
Operating Income $ 44 $ 71 61%
========= =========
Pipelines Operating Data:
Throughput data in BCF
Transportation 294 424 44%
========= =========
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 Ended
March 31,
-------------------- % Diff
2007 2008 Fav/(Unfav)
-------- -------- --------
Results of Operations:
Revenues $ 39 $ 58 49%
-------- --------
Expenses:
Natural gas (3) (2) (33%)
Operation and maintenance 16 11 31%
Depreciation and amortization 3 3 --
Taxes other than income taxes 1 1 --
-------- --------
Total 17 13 24%
-------- --------
Operating Income $ 22 $ 45 105%
======== ========
Field Services Operating Data:
Throughput data in BCF
Gathering 93 98 5%
======== ========
Other Operations
--------------------------------
Quarter Ended
March 31,
-------------------- % Diff
2007 2008 Fav/(Unfav)
-------- -------- --------
Results of Operations:
Revenues $ 2 $ 3 50%
Expenses 4 1 75%
-------- --------
Operating Income (Loss) $ (2) $ 2 200%
======== ========
Capital Expenditures by Segment
(Millions of Dollars)
(Unaudited)
--------------------
Quarter Ended
March 31,
--------------------
2007 2008
-------- --------
Capital Expenditures by Segment
Electric Transmission &
Distribution $ 110 $ 89
Natural Gas Distribution 33 38
Competitive Natural Gas Sales
and Services 2 1
Interstate Pipelines 154 28
Field Services 27 18
Other Operations 11 8
-------- --------
Total $ 337 $ 182
======== ========
Interest Expense Detail
(Millions of Dollars)
(Unaudited)
--------------------
Quarter Ended
March 31,
--------------------
2007 2008
-------- --------
Interest Expense Detail
Amortization of Deferred
Financing Cost $ 19 $ 6
Capitalization of Interest Cost (8) (3)
Transition Bond Interest Expense 31 33
Other Interest Expense 112 112
-------- --------
Total Interest Expense $ 154 $ 148
======== ========
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, March 31,
2007 2008
--------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $ 129 $ 70
Other current assets 2,659 2,281
--------- ---------
Total current assets 2,788 2,351
--------- ---------
Property, Plant and Equipment, net 9,740 9,802
--------- ---------
Other Assets:
Goodwill 1,696 1,696
Regulatory assets 2,993 2,907
Other non-current assets 655 779
--------- ---------
Total other assets 5,344 5,382
--------- ---------
Total Assets $ 17,872 $ 17,535
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $ 232 $ 200
Current portion of transition bond long-term
debt 159 186
Current portion of other long-term debt 1,156 724
Other current liabilities 2,244 2,174
--------- ---------
Total current liabilities 3,791 3,284
--------- ---------
Other Liabilities:
Accumulated deferred income taxes, net and
investment tax credit 2,266 2,258
Regulatory liabilities 828 795
Other non-current liabilities 813 772
--------- ---------
Total other liabilities 3,907 3,825
--------- ---------
Long-term Debt:
Transition bond 2,101 2,485
Other 6,263 6,061
--------- ---------
Total long-term debt 8,364 8,546
--------- ---------
Shareholders' Equity 1,810 1,880
--------- ---------
Total Liabilities and Shareholders' Equity $ 17,872 $ 17,535
========= =========
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)
Three Months Ended
March 31,
--------------------
2007 2008
--------- ---------
Cash Flows from Operating Activities:
Net income $ 130 $ 123
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 164 165
Deferred income taxes (13) 27
Changes in net regulatory assets 22 14
Changes in other assets and liabilities (56) 226
Other, net 17 12
--------- ---------
Net Cash Provided by Operating Activities 264 567
Net Cash Used in Investing Activities (403) (312)
Net Cash Provided by (Used in) Financing
Activities 72 (314)
--------- ---------
Net Decrease in Cash and Cash Equivalents (67) (59)
Cash and Cash Equivalents at Beginning of Period 127 129
--------- ---------
Cash and Cash Equivalents at End of Period $ 60 $ 70
========= =========
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of
CenterPoint Energy, Inc.