HOUSTON, Nov. 5, 2008 (GLOBE NEWSWIRE) -- CenterPoint Energy, Inc. (NYSE:CNP) today reported net income of $136 million, or $0.39 per diluted share, for the third quarter of 2008 compared to $91 million, or $0.27 per diluted share, for the same period of 2007.
"We continue to see the benefits of our balanced electric and natural gas portfolio. Strong results in our field services and competitive natural gas businesses helped offset the loss of revenue from Hurricane Ike," said David M. McClanahan, president and chief executive officer of CenterPoint Energy. "With over 90 percent of our customers without power following the storm, the challenges brought on by Hurricane Ike were significant. I'm extremely proud of the extraordinary efforts of our employees and the thousands of workers from 35 other states and Canada who worked to repair our system and restore service to our customers."
For the nine months ended September 30, 2008, net income was $360 million, or $1.05 per diluted share, compared to $291 million, or $0.85 per diluted share, for the same period of 2007.
OPERATING INCOME BY SEGMENT
Electric Transmission & Distribution
The electric transmission & distribution segment reported operating income of $202 million for the third quarter of 2008, consisting of $169 million from the regulated electric transmission & distribution utility operations (TDU) and $33 million related to transition bonds. Operating income for the third quarter of 2007 was $196 million, consisting of $155 million from the TDU, $30 million related to transition bonds, and $11 million from the competition transition charge (CTC). In February 2008, the company monetized the remaining allowed true-up balance, resulting in the discontinuance of the CTC.
When Hurricane Ike's 110 mile-per-hour winds struck our service territory in September, more than 2 million customers lost power, but the TDU was able to restore power to all customers capable of receiving it within 18 days. As a result of this timely restoration effort, the estimated loss of third quarter revenue to the TDU was limited to $17 million. The loss of revenue from Hurricane Ike was more than offset by strong customer growth of over 42,000 metered customers since September 2007, increased usage, and reduced costs associated with normal operating and maintenance activities delayed because of the storm. In addition, taxes other than income taxes declined due to the Texas margin tax being classified as income tax beginning in 2008 and a refund of prior-year state franchise taxes.
The cost to repair the system and restore service is estimated to be in the range of $650 to $750 million. These costs are being deferred for future recovery through the regulatory process and therefore do not affect third quarter earnings.
Operating income for the nine months ended September 30, 2008, was $457 million, consisting of $352 million from the TDU, $100 million related to transition bonds, and $5 million from the CTC. Operating income for the same period of 2007 was also $457 million, consisting of $335 million from the TDU, $90 million related to transition bonds, and $32 million from the CTC.
Natural Gas Distribution
The natural gas distribution segment reported an operating loss of $6 million for the third quarter of 2008 compared to a loss of $8 million for the same period of 2007. Operating income benefited from new rates implemented in late 2007 and continued customer growth of nearly 26,000 metered customers since September 2007. Due to seasonal impacts, the third quarter is typically the weakest quarter for this segment.
Operating income for the nine months ended September 30, 2008, was $119 million compared to $129 million for the same period of 2007.
Interstate Pipelines
The interstate pipelines segment reported operating income of $55 million for the third quarter of 2008 compared to $70 million for the same period of 2007. The third quarter of 2008 included a $7 million write-down associated with pipeline assets removed from service, while the third quarter of 2007 included tax refunds of $4 million related to settlements of certain state tax issues and gains of $5 million associated with the sale of the pipeline services business. Excluding these items, higher income from the Carthage to Perryville pipeline and other transportation services was offset by reduced ancillary services and higher operation and maintenance expenses.
Operating income for the nine months ended September 30, 2008, was $227 million compared to $166 million for the same period of 2007.
Field Services
The field services segment reported operating income of $44 million for the third quarter of 2008 compared to $26 million for the same period of 2007. Operating income increased primarily from higher throughput, increased ancillary services, and a gain of $7 million associated with system imbalances.
In addition to operating income, this business had equity income of $4 million in the third quarter of 2008 compared to $2 million in the third 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.
Operating income for the nine months ended September 30, 2008, was $121 million compared to $75 million for the same period of 2007. Equity income from the jointly-owned gas processing plant was $12 million for the nine months ended September 30, 2008, compared to $6 million for the same period of 2007.
Competitive Natural Gas Sales and Services
The competitive natural gas sales and services segment reported operating income of $35 million for the third quarter of 2008 compared to $4 million for the same period of 2007. Approximately $7 million of the increase was due to favorable locational and seasonal price differentials. The third quarter of 2008 included gains of $46 million resulting from mark-to-market accounting for derivatives used to lock in economic margins of certain forward natural gas sales compared to mark-to-market gains of $2 million for the same period of 2007. The third quarter of 2008 also included a $24 million write-down of natural gas inventory to the lower of average cost or market, compared to a $5 million inventory write-down for the same period of 2007.
Operating income for the nine months ended September 30, 2008, was $36 million compared to $56 million for the same period of 2007. The nine months ended September 30, 2008, included gains of $14 million resulting from mark-to-market accounting compared to charges of $12 million for the same period of 2007. Additionally, the nine months ended September 30, 2008, included $24 million in inventory write-downs compared to $11 million in inventory write-downs for the same period of 2007.
DIVIDEND DECLARATION
On October 30, 2008, CenterPoint Energy's board of directors declared a regular quarterly cash dividend of $0.1825 per share of common stock payable on December 10, 2008, to shareholders of record as of the close of business on November 14, 2008.
2008 REVISED GUIDANCE
CenterPoint Energy expects diluted earnings per share for 2008 to be in the range of $1.25 to $1.35. Previously-provided guidance was for earnings to be in the upper half of $1.15 to $1.25 per diluted share. This guidance takes into consideration performance to date as well as 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, including recovery of costs associated with Hurricane Ike, 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, the timing effects of mark-to-market or inventory accounting in our competitive natural gas sales and services business, 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 September 30, 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, November 5, 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 $19 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 and its subsidiaries' Form 10-Qs for the periods ended March 31, 2008, and June 30, 2008, CenterPoint Energy's Form 10-Q for the period ended September 30, 2008, and other filings with the SEC.
CenterPoint Energy, Inc. and Subsidiaries
Statements of Consolidated Income
(Millions of Dollars)
(Unaudited)
Nine Months
Quarter Ended Ended
September 30, September 30,
-------------- --------------
2007 2008 2007 2008
------ ------ ------ ------
Revenues:
Electric Transmission
& Distribution $ 528 $ 552 $1,399 $1,471
Natural Gas Distribution 458 550 2,601 2,976
Competitive Natural Gas Sales
and Services 770 1,269 2,715 3,632
Interstate Pipelines 137 143 348 468
Field Services 44 71 125 191
Other Operations 3 3 8 8
Eliminations (58) (73) (175) (198)
------ ------ ------ ------
Total 1,882 2,515 7,021 8,548
------ ------ ------ ------
Expenses:
Natural gas 991 1,532 4,349 5,675
Operation and maintenance 349 371 1,031 1,078
Depreciation and amortization 170 194 475 540
Taxes other than income taxes 85 81 284 285
------ ------ ------ ------
Total 1,595 2,178 6,139 7,578
------ ------ ------ ------
Operating Income 287 337 882 970
------ ------ ------ ------
Other Income (Expense) :
Loss on Time Warner investment (58) (36) (74) (73)
Gain on indexed debt securities 56 33 70 66
Interest and other finance charges (126) (116) (368) (344)
Interest on transition bonds (30) (34) (93) (102)
Distribution from AOL Time Warner
litigation settlement 32 -- 32 --
Additional distribution
to ZENS holders (27) -- (27) --
Other - net 11 29 23 56
------ ------ ------ ------
Total (142) (124) (437) (397)
------ ------ ------ ------
Income Before Income Taxes 145 213 445 573
Income Tax Expense (54) (77) (154) (213)
------ ------ ------ -------
Net Income $ 91 $ 136 $ 291 $ 360
====== ====== ====== ======
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 Nine Months Ended
September 30, September 30,
------------------ ------------------
2007 2008 2007 2008
-------- -------- -------- --------
Basic Earnings Per Common
Share:
Net Income $ 0.29 $ 0.40 $ 0.91 $ 1.08
======== ======== ======== ========
Diluted Earnings Per Common
Share:
Net Income $ 0.27 $ 0.39 $ 0.85 $ 1.05
======== ======== ======== ========
Dividends Declared per Common
Share $ 0.17 $ 0.1825 $ 0.51 $ 0.5475
Weighted Average Common Shares
Outstanding (000):
- Basic 321,192 342,228 320,071 333,652
- Diluted 340,974 344,584 342,222 342,187
Operating Income (Loss) by
Segment
--------------------------
Electric Transmission &
Distribution:
Electric Transmission and
Distribution Operations $ 155 $ 169 $ 335 $ 352
Competition Transition Charge 11 -- 32 5
-------- -------- -------- --------
Total Electric Transmission
and Distribution Utility 166 169 367 357
Transition Bond Companies 30 33 90 100
-------- -------- -------- --------
Total Electric Transmission
& Distribution 196 202 457 457
Natural Gas Distribution (8) (6) 129 119
Competitive Natural Gas Sales
and Services 4 35 56 36
Interstate Pipelines 70 55 166 227
Field Services 26 44 75 121
Other Operations (1) 7 (1) 10
-------- -------- -------- --------
Total $ 287 $ 337 $ 882 $ 970
======== ======== ======== ========
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 Nine Months Ended
September 30, % Diff September 30, % Diff
--------------------- Fav/ --------------------- Fav/
2007 2008 (Unfav) 2007 2008 (Unfav)
---------- ---------- ----- ---------- ---------- -----
Results of
Operations:
Revenues:
Electric
transmission
and
distribution
utility $ 445 $ 455 2% $ 1,187 $ 1,220 3%
Transition
bond
companies 83 97 17% 212 251 18%
---------- ---------- ---------- ----------
Total 528 552 5% 1,399 1,471 5%
---------- ---------- ---------- ----------
Expenses:
Operation and
maintenance 163 167 (2%) 467 502 (7%)
Depreciation
and
amortization 58 71 (22%) 182 208 (14%)
Taxes other
than income
taxes 58 48 17% 171 153 11%
Transition
bond
companies 53 64 (21%) 122 151 (24%)
---------- ---------- ---------- ----------
Total 332 350 (5%) 942 1,014 (8%)
---------- ---------- ---------- ----------
Operating
Income $ 196 $ 202 3% $ 457 $ 457 --
========== ========== ========== ==========
Operating
Income:
Electric
transmission
and
distribution
operations $ 155 $ 169 9% $ 335 $ 352 5%
Competition
transition
charge 11 -- -- 32 5 (84%)
Transition
bond
companies 30 33 10% 90 100 11%
---------- ---------- ---------- ----------
Total
Segment
Operating
Income $ 196 $ 202 3% $ 457 $ 457 --
========== ========== ========== ==========
Electric
Transmission &
Distribution
Operating
Data:
Actual MWH
Delivered
Residential 8,381,258 8,445,744 1% 19,060,031 19,623,125 3%
Total 22,725,500 21,594,051 (5%) 58,560,692 58,523,281 --
Weather
(average for
service
area):
Percentage of
10-year
average:
Cooling
degree days 102% 97% (5%) 99% 104% 5%
Heating
degree days 0% 0% 0% 114% 95% (19%)
Average number
of metered
customers:
Residential 1,782,281 1,822,351 2% 1,767,431 1,812,821 3%
Total 2,022,448 2,066,538 2% 2,006,344 2,055,723 2%
Natural Gas Distribution
-------------------------------------------------------
Quarter Ended Nine Months Ended
September 30, % Diff September 30, % Diff
--------------------- Fav/ --------------------- Fav/
2007 2008 (Unfav) 2007 2008 (Unfav)
---------- ---------- ----- ---------- ---------- -----
Results of
Operations:
Revenues $ 458 $ 550 20% $ 2,601 $ 2,976 14%
---------- ---------- ---------- ----------
Expenses:
Natural gas 267 351 (31%) 1,845 2,196 (19%)
Operation and
maintenance 139 139 -- 421 436 (4%)
Depreciation
and
amortization 38 40 (5%) 114 118 (4%)
Taxes other
than income
taxes 22 26 (18%) 92 107 (16%)
---------- ---------- ---------- ----------
Total 466 556 (19%) 2,472 2,857 (16%)
---------- ---------- ---------- ----------
Operating
Income
(Loss) $ (8) $ (6) 25% $ 129 $ 119 (8%)
========== ========== ========== ==========
Natural Gas
Distribution
Operating
Data:
Throughput
data in BCF
Residential 12 13 8% 118 117 (1%)
Commercial
and
Industrial 42 41 (2%) 168 171 2%
---------- ---------- ---------- ----------
Total
Throughput 54 54 -- 286 288 1%
========== ========== ========== ==========
Weather
(average for
service area)
Percentage of
10-year
average:
Heating
degree days 75% 57% (18%) 98% 106% 8%
Average number
of customers:
Residential 2,910,041 2,937,618 1% 2,927,122 2,956,500 1%
Commercial
and
Industrial 246,021 245,514 -- 246,382 248,759 1%
---------- ---------- ---------- ----------
Total 3,156,062 3,183,132 1% 3,173,504 3,205,259 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
------------------------------------------
Nine Months
Quarter Ended Ended
September 30, % Diff September 30, % Diff
-------------- Fav/ -------------- Fav/
2007 2008 (Unfav) 2007 2008 (Unfav)
------ ------ ----- ------ ------ -----
Results of Operations:
Revenues $ 770 $1,269 65% $2,715 $3,632 34%
------ ------ ------ ------
Expenses:
Natural gas 756 1,225 (62%) 2,631 3,567 (36%)
Operation and maintenance 7 8 (14%) 23 26 (13%)
Depreciation and
amortization 3 1 67% 4 2 50%
Taxes other than income
taxes -- -- -- 1 1 --
------ ------ ------ ------
Total 766 1,234 (61%) 2,659 3,596 (35%)
------ ------ ------ ------
Operating Income $ 4 $ 35 775% $ 56 $ 36 (36%)
====== ====== ====== ======
Competitive Natural Gas
Sales and Services
Operating Data:
Throughput data in BCF 119 125 5% 393 392 --
====== ====== ====== ======
Average number of
customers 6,976 9,245 33% 7,014 8,974 28%
====== ====== ====== ======
Interstate Pipelines
------------------------------------------
Nine Months
Quarter Ended Ended
September 30, % Diff September 30, % Diff
-------------- Fav/ ------------- Fav/
2007 2008 (Unfav) 2007 2008 (Unfav)
------ ------ ----- ------ ------ -----
Results of Operations:
Revenues $ 137 $ 143 4% $ 348 $ 468 34%
------ ------ ------ ------
Expenses:
Natural gas 27 24 11% 55 97 (76%)
Operation and maintenance 29 47 (62%) 85 93 (9%)
Depreciation and
amortization 11 11 -- 32 34 (6%)
Taxes other than income
taxes -- 6 -- 10 17 (70%)
------ ------ ------ ------
Total 67 88 (31%) 182 241 (32%)
------ ------ ------ ------
Operating Income $ 70 $ 55 (21%) $ 166 $ 227 37%
====== ====== ====== ======
Pipelines Operating Data:
Throughput data in BCF
Transportation 312 360 15% 880 1,145 30%
====== ====== ====== ======
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
------------------------------------------
Nine Months
Quarter Ended Ended
September 30, % Diff September 30, % Diff
------------- Fav/ ------------- Fav/
2007 2008 (Unfav) 2007 2008 (Unfav)
----- ----- ------ ----- ----- ------
Results of Operations:
Revenues $ 44 $ 71 61% $ 125 $ 191 53%
----- ----- ----- -----
Expenses:
Natural gas (2) 5 (350%) (9) 11 (222%)
Operation and maintenance 17 19 (12%) 49 48 2%
Depreciation and
amortization 2 3 (50%) 8 9 (13%)
Taxes other than income
taxes 1 -- -- 2 2 --
----- ----- ----- -----
Total 18 27 (50%) 50 70 (40%)
----- ----- ----- -----
Operating Income $ 26 $ 44 69% $ 75 $ 121 61%
===== ===== ===== =====
Field Services Operating
Data:
Throughput data in BCF
Gathering 104 109 5% 297 311 5%
===== ===== ===== =====
Other Operations
------------------------------------------
Nine Months
Quarter Ended Ended
September 30, % Diff September 30, % Diff
------------- Fav/ ------------- Fav/
2007 2008 (Unfav) 2007 2008 (Unfav)
----- ----- ------ ----- ----- ------
Results of Operations:
Revenues $ 3 $ 3 -- $ 8 $ 8 --
Expenses 4 (4) 200% 9 (2) 122%
----- ----- ---- -----
Operating Income (Loss) $ (1) $ 7 800% $ (1) $ 10 1,100%
===== ===== ===== =====
Capital Expenditures by Segment
(Millions of Dollars)
(Unaudited)
-----------------------------------
Nine Months
Quarter Ended Ended
September 30, September 30,
------------- -------------
2007 2008 2007 2008
----- ----- ----- -----
Capital Expenditures by
Segment
Electric Transmission &
Distribution $ 83 $ 80 $ 304 $ 256
Hurricane Ike -- 141 -- 141
----- ----- ----- -----
Total Electric
Transmission &
Distribution 83 221 304 397
Natural Gas Distribution 58 57 135 151
Competitive Natural Gas
Sales and Services 1 1 5 3
Interstate Pipelines 39 60 253 130
Field Services 15 31 55 77
Other Operations 5 5 22 18
----- ----- ----- -----
Total $ 201 $ 375 $ 774 $ 776
===== ===== ===== =====
Interest Expense Detail
(Millions of Dollars)
(Unaudited)
-----------------------------------
Nine Months
Quarter Ended Ended
September 30, September 30,
------------- -------------
2007 2008 2007 2008
----- ----- ----- -----
Interest Expense Detail
Amortization of Deferred
Financing Cost $ 11 $ 6 $ 42 $ 18
Capitalization of
Interest Cost (3) (3) (18) (10)
Transition Bond Interest
Expense 30 34 93 102
Other Interest Expense 118 113 344 336
----- ----- ----- -----
Total Interest Expense $ 156 $ 150 $ 461 $ 446
===== ===== ===== =====
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)
Dec. 31, Sept. 30,
2007 2008
-------- --------
ASSETS
Current Assets:
Cash and cash equivalents $ 129 $ 84
Other current assets 2,659 2,753
-------- --------
Total current assets 2,788 2,837
-------- --------
Property, Plant and Equipment, net 9,740 10,149
-------- --------
Other Assets:
Goodwill 1,696 1,696
Regulatory assets 2,993 3,219
Other non-current assets 655 1,131
-------- --------
Total other assets 5,344 6,046
-------- --------
Total Assets $ 17,872 $ 19,032
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $ 232 $ 150
Current portion of transition bond long-term debt 159 208
Current portion of other long-term debt 1,156 123
Other current liabilities 2,244 2,391
-------- --------
Total current liabilities 3,791 2,872
-------- --------
Other Liabilities:
Accumulated deferred income taxes, net
and investment tax credit 2,266 2,713
Regulatory liabilities 828 808
Other non-current liabilities 813 783
-------- --------
Total other liabilities 3,907 4,304
-------- --------
Long-term Debt:
Transition bond 2,101 2,381
Other 6,263 7,416
-------- --------
Total long-term debt 8,364 9,797
-------- --------
Shareholders' Equity 1,810 2,059
-------- --------
Total Liabilities and Shareholders' Equity $ 17,872 $ 19,032
======== ========
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)
Nine Months Ended
September 30,
------------------
2007 2008
-------- --------
Cash Flows from Operating Activities:
Net income $ 291 $ 360
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 519 560
Deferred income taxes 23 471
Changes in net regulatory assets 57 (48)
Changes in other assets and liabilities (410) (584)
Other, net 12 (35)
-------- --------
Net Cash Provided by Operating Activities 492 724
Net Cash Used in Investing Activities (933) (991)
Net Cash Provided by Financing Activities 368 222
-------- --------
Net Decrease in Cash and Cash Equivalents (73) (45)
Cash and Cash Equivalents at Beginning of
Period 127 129
-------- --------
Cash and Cash Equivalents at End of Period $ 54 $ 84
======== ========
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of
CenterPoint Energy, Inc.